Retail-sales increase is led by auto purchases

Associated Press

WASHINGTON

A surge in auto purchases helped lift retail sales in October by the largest amount in seven months. But excluding autos, retail sales rose more modestly.

October marked the fourth-straight increase in retail sales after declines in May and June. Those drops had raised fears about the economic recovery. Still, economists say consumers probably aren’t spending enough to lift sales growth above the lackluster pace of the past six months.

Consumers still are struggling with scant income gains, high debts and painfully high unemployment, which remains stuck at 9.6 percent even though the recession ended more than a year ago.

Paul Dales, U.S. economist at Capital Economics, interpreted October’s retail sales as a sign that consumption growth is improving. He cautioned that spending remains too tepid to drive economic growth higher in the current quarter. Consumer spending is watched closely because it accounts for 70 percent of U.S. economic activity.

Overall retail sales rose 1.2 percent in October, the Commerce Department said Monday.