U.S. retail and food services sales rose more than expected for the fourth consecutive month in October, mainly spurred by a rise in auto and other motor vehicle dealer sales, a report from the U.S. Commerce Department stated.
U.S. retail and food services sales rose 1.2 percent to $373.1 billion from the previous month. It was up 7.3 percent from a year ago, the report stated.
Economists were expecting a rise of 0.7 percent for the month, according to economists polled by Reuters.
Excluding autos, sales rose 0.4 percent, the report stated.
Auto and other motor vehicle sales were up 14.7 percent in October from last year. Non-store retailers were up 13.5 percent.
The gain in autos is much larger than the gain suggested by data on the sales of auto manufacturers, Paul Dales, an economist with Capital Economics, said in a note.
It is possible that the effects of the expiry of the Cash for Clunkers scheme this time last year has messed up the BEA's seasonal adjustment process and exacerbated the increase in auto sales this October, he added.
Today's numbers will likely result in higher expectations for what is shaping up to be the first solid holiday shopping season in three years, Mark Vitner, an economist with Wells Fargo Capital, said.
Total sales for the August to October period were up 6.3 percent from last year. Retail trade sales rose 1.3 percent from September.
The upshot is that these figures suggest that real consumption growth started the fourth quarter at a fairly healthy clip, Dales said.
However, with the hit to households' real spending power from higher gasoline and food prices yet to come, it still looks as though consumption will be unable to shift the economic recovery into a higher gear, he added.