Auto rebound helps retail sales rise in October

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WASHINGTON --- U.S. retail sales rose more than expected in October due largely to a big rebound in auto sales. But broader consumer spending remains under pressure, raising questions about the durability of the recovery.

Last month's jump in sales also followed a dismal September retail performance that was revised even lower by the government, and many analysts remain concerned about consumer demand going forward.

The Commerce Department said Monday that retail sales rose 1.4 percent last month. Economists surveyed by Thomson Reuters had expected a gain of 1 percent.

Meanwhile, Federal Reserve Chairman Ben Bernanke said the central bank will keep a close eye on the sliding U.S. dollar even as he pledged anew to keep interest rates at record-lows.

Economists expect the Fed will hold rates near zero at its next meeting on Dec. 15-16 and into part of next year to help the recovery gain traction.

Excluding auto sales, retail demand rose 0.2 percent, half of the expected 0.4 percent rise. The government also revised the September results down to a 2.3 percent decline, from the 1.5 percent drop initially reported.

New car sales surged in August as shoppers rushed to take advantage of the government's Cash for Clunkers sales incentives before they expired at the end of the month. Sales plunged in September.

For October, auto sales jumped 7.4 percent, recouping about half of the 14.3 percent drop in September. Automakers reported that their sales rebounded last month to an annual rate of 10.5 million units, from 9.2 million in September.

The 0.2 percent increase in retail sales excluding autos was down from a 0.4 percent rise in September and was the weakest showing since July.

Sales also fell 0.8 percent at furniture stores and 0.6 percent at electronics and appliance stores. Sales were flat at gasoline service stations and posted a 0.2 percent rise at grocery stores.


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