WASHINGTON (Reuters) ? Retail sales grew at their fastest pace in seven months in September as consumers shook off concerns about a weak stock market and political gridlock, giving a bit more momentum to the economic recovery.
Sales rose 1.1 percent from a month earlier, boosted by strong auto purchases, the Commerce Department said on Friday.
The reading beat the median forecast in a Reuters poll for a 0.7 percent rise. Sales growth during August was revised upward to 0.3 percent.
Consumer spending accounts for about two thirds of U.S. economic activity, and the data suggests growth at the end of the July-September period might have been stronger than previously thought.
"It looks like third-quarter GDP is going to be better than the first and second quarter combined," said John Canally, an investment strategist and economist for LPL Financial in Boston.
The economy grew at less than a 1 percent annual rate over the first half of the year.
Sales of motor vehicles and parts rose 3.6 percent, the biggest gain since March 2010. That increase -- along with higher sales of furniture, gasoline and electronics -- made up for lower grocery store and building material receipts. Spending at restaurants and bars also rose.
U.S. economic growth in the first half of the year was hit by a spike in gasoline prices and a March earthquake catastrophe in Japan that clogged up global supply conduits and hurt auto output.
But even excluding autos, sales increased 0.6 percent in September, above forecasts for a 0.3 percent gain.
U.S. stock futures gained after the data, while prices for U.S. government debt fell.
CONSUMER RESOLVE
Consumer confidence rebounded modestly in September after dipping in early August to its lowest in more than three decades.
Confidence sank deeply over the summer when a bruising battle over the U.S. budget slammed stock prices and pushed the nation to the brink of default. Even with September's modest improvement, Americans were still more worried about the economy's outlook than at any point since 1980.
Stripping out sales of gasoline, autos and building materials, so-called core retail sales rose 0.6 percent in September.
Excluding the 1.2 percent rise in gasoline sales, retail sales were 1.1 percent.
U.S. import prices unexpectedly rose in September to post their largest gain in five months on higher fuel and food costs, according to a separate government report on Friday that pointed to some build-up in imported inflation pressure.
The Federal Reserve has been more concerned about the tepid pace of the economic recovery than inflation pressures, and has said it stands ready to help the economy more if needed. It has already cut overnight lending rates to near zero and pumped about $2.3 trillion into the banking system.
(Additional reporting by Chuck Mikolajczak in New York, Editing by Andrea Ricci)
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