Retail sales rose more than projected in September, reflecting broad-based gains that indicate household spending helped bolster economic growth last quarter.
The 1.1 percent advance 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 Monday in a report. 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., which includes T.J. Maxx and Marshalls, keep attracting customers. At the same time, rising energy costs and concern about looming tax changes at the end of the year could prevent consumer spending, which accounts for about 70 percent of the economy, from strengthening much more.
There is “some resilience on the part of the consumer,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, who projected a 1 percent increase in sales. “We are going to continue to see slow, but steady, growth.”
Other reports Monday showed that inventories rose at a slower pace in August, indicating that unexpected strength in sales might be starting to drain stockpiles, and manufacturing in the New York region contracted in October for a third straight month.
The 0.6 percent increase in what are called goods on hand followed a 0.8 percent gain in July, Commerce Department data showed. Sales at factories, wholesalers and retailers climbed 0.5 percent after advancing 0.9 percent the prior month.
The Federal Reserve Bank of New York’s Empire State index rose to minus 6.2 this month from minus 10.4 in September, which was the lowest since April 2009.
The retail sales 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. The results were similar to 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 and General Motors reported gains.
The retail sales data, which aren’t adjusted for prices, might have reflected an increase in gasoline prices. A gallon of regular fuel at the pump cost an average $3.83 in September, up 13 cents from August and the highest level since April, according to AAA, the biggest U.S. auto group.
Electronics dealers showed a 4.5 percent jump in sales, the biggest gain since October 2011. The introduction of the Apple Inc. iPhone 5 at the end of the month probably helped spur demand. Similarly, non-store retailers, which include online merchants, may have also benefited, leading to a 1.8 percent gain in receipts.
Spending increased 0.6 percent at clothing stores and 0.3 percent at general merchandise stores.