Report: Consumer Spending Healthy During 3Q

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October 15, 2012 by   Comments Off on Report: Consumer Spending Healthy During 3Q

U.S. retail sales rose in September as Americans bought more cars and gasoline, while a gauge of consumer spending pointed to stronger-than-expected economic growth in the third quarter.

Reuters reported that retail sales increased 1.1%, the Commerce Department said on Monday (Oct. 15), beating expectations after an upwardly revised 1.2% rise in August.

Retail sales outside of autos, gasoline and building materials — a barometer of consumer spending known as core retail sales — rose 0.9% last month.

That was well above the 0.3% gain expected by analysts in a Reuters poll, and suggests consumers did more to drive economic growth in the July-September period than economists had expected.

Consumer spending drives about two-thirds of the U.S. economy.

Sluggish demand and a punishing drought restricted the economy to a 1.3 percent annual growth pace in the April-June period. Before the retail sales report was released, economists were expecting growth to accelerate to a 1.6% pace in the third quarter, according to a Reuters poll.

The details of the report showed broad strength across retailers, with sales of motor vehicles and parts up 1.3%. Receipts at gasoline stations rose 2.5%, reflecting an increase in prices paid at the pump.

Other categories were also strong, with sales at electronics retailers up 4.5%, while sales at food and beverage stores rose 1.2%.

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