U.S. retail sales rose more than expected in September as Americans spent more on cars, clothing and fuel, an indication that consumers remain willing to shop despite high unemployment and a weak recovery.
Retail and food services sales climbed 1.1% from the previous month to an adjusted $395.47 billion U.S., the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires had forecast a 0.8% increase.
August retail sales were revised up to a 0.3% gain. The Commerce Department originally estimated that sales were flat.
Retail sales are an important indicator of consumer spending, typically a major driver of economic growth.
Higher food and energy prices crimped purchasing power earlier this year, while the debt ceiling crisis along with stock market losses undermined confidence. Recent data, meanwhile, showed that incomes fell in August, the first drop in nearly two years. That forced Americans to dig into their savings in order to maintain their living standards.
But September's broad-based retail spending gains indicate a degree of optimism.
Friday's data showed a 3.6% jump for auto and parts sales. Excluding cars, overall retail sales were up 0.6%. Economists had expected retail sales excluding autos to climb 0.4%.
Restaurant, furniture, clothing, department store and non-store retail sales -- a category that includes the Internet -- all posted gains. Gasoline station sales also showed another increase.
Building, sporting goods and grocery store sales all slid.
Businesses are fighting for customers in a tough environment.
Safeway Inc.'s third-quarter earnings rose 6% as increased fuel sales helped boost the supermarket operator's revenue, though its profit margin slipped.
Safeway has tried to offset higher wholesale-food expenses and commodities costs by selling more of its private-label products and controlling costs. Chief Executive Steve Burd Thursday said that in the second quarter, high food-cost inflation and rising gas prices were curtailing consumer spending and causing a rough patch in earnings, but that sales momentum began picking up in the last five weeks of the second quarter.
