Retail sales rose 0.3% in October, the Census Bureau said, topping expectations for a 0.2% rise and offering the prospect of a better-than-expected holiday shopping season. But it was the specific ways the data got better that points the nozzle of credit in the direction of the gas pump.
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The notably big gains came in discretionary spending, in categories that are exactly where you'd look to see a short-term pop when consumers get a little more money in their pockets. Restaurant sales jumped 0.9%, well above the clip of the last year. Sales at online retailers rose 1.9% after a 0.3% decline in September, which had helped cause the stock market's wobbly performance in October.
"Retail sales snapped back in October with a solid performance, indicating a healthy holiday shopping season ahead," said Jack Kleinhenz, chief economist of the National Retail Federation. "A boost from plunging gas prices and accelerating job growth, combined with wage and salary gains and rising stock prices, are making consumers a bit more willing to spend."
Holiday sales should rise between 4% and 4.5%, up from last year's 3.8% growth over 2012, economists at PNC Financial said Friday. "About 1.0-1.5 percentage points will come from higher prices and about 2.5-3.0 percentage points from higher unit sales," Chief Economist Stuart Hoffman wrote in a note to clients.