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US Retail Sales Jumped 1.1 Percent In September

Still, excluding autos and gas, sales were up a solid 0.9 percent in September.

Until recently, high unemployment and weak pay increases have kept consumers from spending more freely this year. That has held back growth. The economy grew at a weak 1.3 percent rate in the April-June quarter. Most economists believe growth will stay around 2 percent for year, although some said the latest retail sales figures could make growth slightly stronger.

There have been other positive signs that growth could pick up. The Conference Board reported that its consumer confidence index rose last month to the highest level since February. And the University of Michigan's preliminary survey of consumer sentiment in October rose to a five-year high.

The job market is looking a little stronger, too. The unemployment rate dropped to 7.8 percent last month, from 8.1 percent in August. It was the first time the rate has been below 8 percent since January 2009. And it fell because of survey of households showed more people found work, although many of the new jobs were part time.

A separate survey of employers showed only modest job growth. Still, the economy has added an average of 146,000 jobs a month in the July-September quarter â¿¿ more than twice the monthly pace in the April-June quarter.

The Federal Reserves' aggressive policies have helped lower interest rates, which has encouraged more home-buying and auto sales.

Home sales are up from last year, which has lifted home prices. When home prices rise, Americans tend to feel wealthier and tend to spend more.

U.S. auto companies reported that sales rose 13 percent in September from a year earlier to nearly 1.2 million. Analysts think sales could hit 14.3 million this year, up from 12.8 million last year.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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