Retail sales point to stronger third-quarter consumer spending

U.S. retail sales rose in September as Americans bought more cars and gasoline, while a gauge of consumer spending pointed to stronger-than-expected economic growth in the third quarter.

Retail sales increased 1.1 percent, the Commerce Department said on Monday, beating expectations after an upwardly revised 1.2 percent rise in August.

Retail sales outside of autos, gasoline and building materials -- a barometer of consumer spending known as core retail sales -- rose 0.9 percent last month.

That was well above the 0.3 percent gain expected by analysts in a Reuters poll, and suggests consumers did more to drive economic growth in the July-September period than economists had expected.

Consumer spending drives about two-thirds of the U.S. economy.

Sluggish demand and a punishing drought restricted the economy to a 1.3 percent annual growth pace in the April-June period. Before the retail sales report was released, economists were expecting growth to accelerate to a 1.6 percent pace in the third quarter, according to a Reuters poll.

The details of the report showed broad strength across retailers, with sales of motor vehicles and parts up 1.3 percent. Receipts at gasoline stations rose 2.5 percent, reflecting an increase in prices paid at the pump.

Other categories were also strong, with sales at electronics retailers up 4.5 percent, while sales at food and beverage stores rose 1.2 percent.

(Reporting by Jason Lange; Editing by Andrea Ricci)