U.S. retail sales rose 1.1 percent in September according to data released on Monday from the Commerce Department, totaling $412.9 billion. The growth is better than expected and good news for the economy, since consumer spending accounts for about 70 percent of the country's total economic growth.
It is the largest gain in retail sales in two years.
Most of the growth was driven by auto sales, which were up 9.3 percent from last year and 1.3 percent from last month, and sales of the iPhone, with electronics and appliances shooting up 4.5 percent in September.
Non-store retail sales were up 15.0 percent from Sept. 2011, the Commerce Department reported.
"This shouldn't be considered the start of a consumer revival," warned Paul Dales, senior U.S. economist at Capital Economics, as reported to the Associated Press. In part, that's because high gas prices and higher food prices brought on by the drought contributed to the increase.
The rise in retail coincides with a sharp drop in unemployment and also modest gains in home sales, reported the Associated Press.
The government's role in lowering interest rates contributed to the increase in home sales and economists are hopeful that the U.S. Federal Reserve's announcement last month that it will buy $40 billion a month in mortgage-backed securities, will have a positive effect on the sector. Home sales are a strong indicator of overall consumer confidence in the economy.
Still, economists are hoping for a strong fourth quarter but warn that it could all come to an end if Congress can't agree on a budget by the end of the year.
A sampling of 5,000 of the more-than three million retail and food services firms registered with the Census Bureau were used to arrive at the figure, according to the Bureau's press release.
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