Retail sales increased 1.1 percent in September to $395.5 billion, the biggest gain in seven months thanks in large part to auto sales, the Commerce Department reported on Friday.
Motor vehicle and parts sales rose 3.9 percent, the largest gain since March 2010. Auto sales rose almost 10 percent in September to 13.1 million cars at an annual pace, the auto makers reported in early October, higher than what many analysts had expected.
Guy LeBas, chief fixed-income strategist with Janney Capital Markets, told ABC News earlier that auto sales “are the single most consistent aspect of consumer spending and, for most people, the largest ticket item they’ll buy in an average five year period.”
Consumer spending overall comprises almost two thirds of the country’s GDP.
Many economists tune into September’s retail sales, which includes back-to-school shopping, for clues about the strength of the holiday shopping season.
While August’s retails sales were tepid, some investors say events such as the debt ceiling debate, the S&P downgrade of U.S. debt, and Hurricane Irene on the East Coast may have chilled spending. The July to August 2011 percent change was revised from virtually unchanged to an increase of 0.3 percent.
September sales increased 7.9 percent from last year. For the 2010, many retailers reported healthy holiday shopping sales, but retail sales rose 0.6 percent last December to $380.9 billion, the Commerce Department reported in January.