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Strong auto purchases buoy US September retail sales
[WASHINGTON] US retail sales rebounded in September amid a surge in motor vehicle purchases and a rise in discretionary spending, pointing to sustained domestic demand that reinforces expectations of an interest rate increase from the Federal Reserve in December.
The Commerce Department said on Friday retail sales increased 0.6 per cent after an upwardly revised 0.2 per cent decline in August. Retail sales in August were previously reported to have decreased 0.3 per cent.
Sales were up 2.7 per cent from a year ago. Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1 per cent last month after an unrevised 0.1 per cent drop in August.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Economists had forecast overall retail sales increasing 0.6 per cent and core sales advancing 0.4 per cent last month.
The retail sales report added to upbeat data on the labour market and manufacturing and services sector surveys that have suggested economic growth regained speed in the third quarter after a lackluster first half.
Minutes of the Fed's Sept 20-21 policy meeting published on Wednesday showed several officials believed it would be appropriate to increase interest rates "relatively soon" if the economy continued to gain strength.
The US central bank raised its benchmark overnight interest rate last December and has held it steady since, largely because of concerns over low inflation.
The Atlanta Fed is currently forecasting the economy growing at a 2.1 per cent annualized rate in the third quarter after a 1.4 per cent expansion pace in the second quarter.
Auto sales rose 1.1 per cent last month after slipping 0.3 per cent in August. Retail sales were also boosted by receipts at service stations, which jumped 2.4 per cent as gasoline prices increased.
Sales at online retailers rose 0.3 per cent. Sales at restaurants and bars advanced 0.8 per cent, the largest gain since February, and receipts at sporting goods and hobby stores surged 1.4 per cent, pointing to healthy discretionary spending.
There were also strong increases in sales at furniture and building material stores. But sales at electronics and appliance outlets fell 0.9 per cent and receipts at clothing stores were flat.