The Commerce Department released a report on Friday showing an unexpected increase in U.S. retail sales in the month of September.
The report said retail sales climbed by 0.7 percent in September after jumping by an upwardly revised 0.9 percent in August.
The continued sales growth came as a surprise to economists, who had expected retail sales to edge down by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
A rebound in sales by motor vehicle and parts dealers contributed to the increase in sales, with auto sales rising by 0.5 percent in September after plunging by 3.3 percent in August.
Excluding auto sales, however, retail sales advanced by a slightly stronger 0.8 percent in September after spiking by an upwardly revised 2.0 percent in August.
Economists had expected ex-auto sales to rise by 0.5 percent compared to the 1.8 percent jump originally reported for the previous month.
Sales by sporting goods, hobby, music and book stores led the way higher, surging up by 3.7 percent, while sales by general merchandise stores, gas stations and clothing and accessories stores also saw notable growth.
The report showed sales by non-store retailers rose by 0.6 percent in September after soaring by 5.7 percent in August, while sales by food services and drinking places edged up by 0.3 percent following a 0.2 percent uptick in the previous month.
Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, increased by 0.8 percent in September after jumping by 2.6 percent in August.
“Households are continuously readjusting their spending mix as the Covid situation evolves and displaying discretion when goods and services are unavailable or prices are considered too high,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.
He added, “Overall though, retail sales remain a healthy 19% higher than pre-Covid level and core sales are 22% higher, and high frequency data points to renewed consumer enthusiasm as of early October.”