Page last updated at 14:57 GMT, Monday, 16 November 2009

US retail spending bounces back

Shopper in Manhattan this month
Excluding car sales, retail spending remains weak

US retail sales rose by more than expected in October, largely due to a resurgent car market, Commerce Department figures have shown.

Sales rose 1.4%, rebounding strongly after September's 1.5% fall was revised down to a decline of 2.3%.

Both months' figures were dominated by the impact of car sales.

Taking out car sales, overall retail sales rose by just 0.2% in October, underlining the fragile nature of the economic recovery, analysts said.

Sales of new vehicles and car parts increased by 7.4% in October.

In contrast, September had seen a 14.3% slump in auto sales after the government's "cash for clunkers" scheme, which offered motorists incentives to buy new cars, came to an end in August.

The government had previously reported a 10.4% fall in auto sales in September.

"The retail sales data was definitely positive for October, but the revision for the prior month neutralises the impact. I think we are moving in the right direction, but it's not a straight line higher," said Sean Simko from the asset management company SEI.

"The consumer is concerned and cautious about their spending habits. Until we see jobs data come in better than expected, the consumer will continue to keep their wallet a little tighter and save, which will be a concern for the holiday season."

The data helped push US stocks higher when Wall Street opened. The Dow Jones index rose 57 points to 10,328 in early trading.

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