Retail Sales Rise at Record Pace in October

As U.S. consumers took advantage of interest-free financing on vehicles and began returning to department stores for holiday gift shopping, retail sales rose 7.1% during October, the biggest increase in almost 10 years of record keeping by the Commerce Department.

Sales totaled $306.8 billion -- almost three times larger than what analysts had expected -- and followed a revised 2.2% percent decrease the month before, which was also a record, Bloomberg reported. Excluding automobiles, sales still rose a larger-than-expected 1% during the month.

Since the consumer sector makes up two-thirds of economic activity, and trucks have to haul goods from factories or ports to stock store shelves, a rise in sales will increase shipments.

Analysts said this report illustrates that consumers are coming to terms with the events of Sept. 11, and are becoming more optimistic about their own finances. Cheaper gasoline is also freeing up extra money.

Overall, sales at automobile dealers, selling vehicles and parts, rose a record 26.4%, while department stores sales increased 0.7%. Clothing and accessory stores saw a 6.9% jump.

Despite this encouraging report, Bloomberg spoke with analysts who warned the nation will still likely see a lackluster holiday shopping season. Nine of 10 consumers recently surveyed by Bloomberg News said they will spend the same amount or less than last year on gifts, which could delay any real economic recovery.

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