WASHINGTON (AP) — Americans spent more money at retailers in September — a buying surge that reflected growing consumer confidence and the launch of the latest iPhone.
Retail sales jumped 1.1 percent last month, producing the best two months of sales in two years, according to figures released Monday 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 increase comes only 10 days after a report that unemployment fell to its lowest level since Obama took office. And it follows a survey last week by the University of Michigan that showed consumer confidence rose in early October to a five-year high.
Businesses appeared to be banking on a resurgent consumer. A second Commerce Department report Monday showed companies increased their stockpiles in August by 0.6 percent 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 percent of economic activity.
In September, retailers saw gains in almost every major category. That contrasted with August’s retail sales, which rose on the strength of auto sales and higher gas prices.
Sales of electronics, appliances and cars all increased. Building materials and garden supplies, furniture and clothing sales all gained, too.
Some of the September increase also reflected higher food and gas prices. If those prices continue to rise, consumers could cut back elsewhere, and that could keep growth from accelerating.