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Retail sales in the U.S. rose more than projected in September, reflecting broad-based gains that indicate household spending helped bolster economic growth last quarter.
The 1.1 percent gain followed a revised 1.2 percent increase in August that was the biggest since October 2010 and larger than previously reported, Commerce Department figures showed last week in Washington. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise.
A drop in joblessness and firming home prices are leading to gains in confidence that may help chains such as Target Corp. and TJX Cos. keep attracting customers. At the same time, rising energy costs and concern about looming tax changes at the end of the year may prevent consumer spending, which accounts for about 70 percent of the economy, from strengthening much more.
“We’re headed in the right direction,” Millan Mulraine, senior U.S. strategist for TD Securities in New York, said before the report. “The labor market is fairly weak but it seems to be at a turning point. We have to get beyond all the uncertainty before we’ll see stronger consumer spending.”
Manufacturing in the New York region contracted in October as sales and employment declined, indicating the economy will get less support from factories, another report last week showed. The Federal Reserve Bank of New York’s general economic index rose to minus 6.2 from minus 10.4 in September, which was the lowest since April 2009.
Economists’ estimates in the Bloomberg survey ranged from gains of 0.3 percent to 1.3 percent. The reading for August was revised from an initially reported increase of 0.9 percent.
Twelve of 13 major categories showed gains last month, led by auto dealers, service stations and electronics stores.
Sales climbed 1.3 percent at automobile dealers, after a 1.8 percent increase the prior month, last week’s report showed. The results are in sync with industry figures issued earlier this month.
Cars and light trucks sold at a 14.9 million annual pace in September, the most since March 2008, according to Ward’s Automotive Group. Chrysler Group LLC and General Motors Co. reported gains.
Retail sales excluding autos increased 1.1 percent, the most since January. They were projected to rise 0.7 percent, according to the Bloomberg survey median. •