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 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 today 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.
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.”
The Standard & Poor’s 500 Index climbed less than 0.1 percent to 1,428.97 at 10:18 a.m. in New York, erasing earlier gains after as a slump in commodities prices weighed on energy shares. Treasury securities rose, sending the yield on the benchmark 10-year note down to 1.65 percent from 1.66 percent late on Oct. 12.
Other reports today showed that inventories in the U.S. rose at a slower pace in August, indicating that unexpected strength in sales may be starting to drain stockpiles, and manufacturing in the New York region contracted in October for a third straight month.
Goods on Hand
The 0.6 percent increase in 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.
Economists’ estimates for retail sales 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, today’s report showed. The results are in sync with industry figures issued earlier this month.