According to figures released by the U.S. Commerce Department on Monday, retail sales increased for the third straight month, rising 1.1 percent. September’s sales numbers improved more than analysts predicted; the Wall Street Journal reported that economists surveyed by Dow Jones Newswires had expected a 0.7 percent increase.
Even though Americans have generally been cautious this year, a combination of several factors led to last month’s better-than-expected results. As the unemployment rate fell to 7.8 percent, with the addition of 114,000 jobs, consumer confidence has grown. The resulting growth drove sales for retailers like Target (NYSE:TGT) and Wal-Mart (NYSE:WMT). Target, the second-biggest U.S. discount retailer, reported a 2.1 percent gain from last year.
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The greatest increase in consumer spending came from electronics purchases. After the iPhone 5 was released in early September, sales at electronics and appliance stores rose 4.5 percent, the greatest increase since October 2011 when the iPhone 4S was released. Growth in electronics sales were supplemented by auto sales; cars and light trucks sold at a 14.9 million annual rate in September, the most since March 2008. General Motors (NYSE:GM) and Toyota (NYSE:TM) both reported sales gains last month, with Toyota increasing sales by 41.5 percent.
Monthly retail sales figures are so closely inspected by Commerce Department because they are an important part of consumer spending. According to the Wall Street Journal, retail sales account for “about two-thirds of demand in the economy.”
While results were better than expected, rising energy costs and the threat of the approaching fiscal cliff affected overall growth.
Nevertheless, the Standard & Poor’s Supercomposite Retailing Index, which includes Macy’s (NYSE:M) and Gap Inc. (NYSE:GPS), has increased 23.1 percent this year, while the S&P Index as a whole rose 13.6 percent.
Retail sales rose 0.7 percent in July and 1.2 percent in August.