Retail sales performed far better than expected in October as Americans took encouragement from falling gasoline prices.
In other good economic news, &to=http://english.pravda.ru/main/18/89/357/15219_petrol.html' target=_blank>core prices at the wholesale level excluding food and energy costs dropped by 0.3 percent last month, the biggest decline in two years. That offered reassurance that the big run-up in energy prices has yet to spill over into more widespread inflation.
The Commerce Department reported that retail sales dipped 0.1 percent in October. However, the weakness was concentrated in a 3.6 percent decline in auto sales as the boost from summer sales incentives waned and consumers shunned gas-guzzling sport utility vehicles.
Excluding autos, retail sales rose by a solid 0.9 percent last month, triple the pace economists had expected with department stores and specialty clothing stores enjoying a strong rebound.
Analysts said a retreat in gasoline prices last month apparently encouraged consumers to resume spending.
"This suggests that the economy has largely shrugged off the ill effects of the hurricanes," said Mark Zandi, chief economist at Economy.com. "Christmas will turn out better than expected."
Before the encouraging retail sales report, economists had worried that the higher energy costs could trigger cutbacks in other areas of retail sales, a worrisome prospect given that consumer spending accounts for two-thirds of total economic activity.