News and Finance

Retail sales rose more than expected in October due largely to a big rebound in auto sales. But broader consumer spending remains under pressure, raising questions about the durability of the recovery.

Last month’s jump in sales also followed a dismal September retail performance that was revised even lower by the government, and many analysts remain concerned about consumer demand going forward.

"Against a background of high unemployment, low income growth and tight credit, it seems unlikely that households will be able to spend more freely anytime soon," wrote Paul Dales, U.S. economist at Capital Economics.

The Commerce Department said retail sales rose 1.4 percent last month. Economists expected a gain of 1 percent. Excluding auto sales, retail demand rose 0.2 percent, half of the expected 0.4 percent rise. The government also revised the September results down to a 2 one hour payday loans.3 percent decline, from the 1.5 percent drop initially reported.

The big swing in overall activity reflects the recent roller-coaster ride for auto sales. New car sales surged in August as shoppers rushed to take advantage of the government’s Cash for Clunkers sales incentives before they expired at the end of the month. Sales plunged in September.

Also Monday, the Commerce Department said businesses slashed inventories for a 13th consecutive month in September although the pace slowed.

Businesses reduced inventories 0.4 percent in September, slightly better than the 0.7 percent drop economists expected and much improved from a 1.6 percent decline in August. Sales also fell, the first setback since May.

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