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Confident consumers give US retail sales a lift

Americans spent more money at retailers in September - a buying surge that reflected growing consumer confidence and the launch of the Apple's latest iPhone.

twitter-logo Associated Press   Washington     Last Updated: October 16, 2012  | 16:47 IST

Americans spent more money at retailers in September - a buying surge that reflected growing consumer confidence and the launch of the Apple's latest iPhone.

Retail sales jumped 1.1 per cent last month, producing the best two months of sales in two years, according to figures released by the Commerce Department.

"The consumer is back," said Joel Naroff, chief economist at Naroff Economic Advisors. "They are not spending money like it is going out of style, but they are spending at a more normal pace that is consistent with a moderately growing economy."

The spike in spending could boost sluggish growth and help revitalize President Barack Obama's campaign after a strong debate performance by challenger Mitt Romney.

The increase comes only 10 days after a report that unemployment fell to its lowest level since Obama took office.

Businesses appeared to be banking on a resurgent consumer.

A second Commerce Department report showed companies increased their stockpiles in August by 0.6 per cent after a slightly larger gain in July. Companies typically step up restocking when they anticipate sales will rise in coming months.

The retail sales report is the government's first monthly look at consumer spending.

Consumer spending is critical because it drives nearly 70 per cent of economic activity.

In September, retailers saw gains in almost every major category. That contrasted with August's retail sales, which rose almost entirely on the strength of auto sales and higher gas prices.

Sales of electronics and appliances last month swelled 4.5 per cent, in part because of iPhone sales. Sales at auto dealers increased 1.3 per cent. Building materials and garden supplies, furniture and clothing sales all gained, too.

The economy remains the top issue in this year's presidential election just three weeks before Election Day.

The two candidates face off on Tuesday in a town-hall debate at Hofstra University in New York just as national polls show the race has tightened.

Most analysts say the second debate is crucial for Obama. The president may also benefit from the batch of encouraging economic figures that show the economy on the rise.

The unemployment rate dropped to 7.8 per cent in September. It was the first time the rate has been below 8 per cent since January 2009.

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