Retail sales rise ahead of holiday shopping

Washington, D.C. --U.S. retail sales edged up in October, according to a report released by the Commerce Department, evidence that recent job gains and lower gas prices are lifting consumer spending as the holiday shopping season begins.



Retail sales rose 0.3% last month after falling by the same amount in September. Excluding gas stations, where falling prices lowered spending, sales rose a solid 0.5%.



Employers have stepped up hiring, giving more Americans paychecks to spend and boosting consumer confidence. Stock prices have reached new highs, possibly encouraging more spending by wealthy households. Greater spending could spur more growth because consumer spending makes up about 70% percent of economic activity.



Auto sales rose a solid 0.5%, after falling sharply in September. Americans also spent more at restaurants and at sporting goods and health care stores. Still, there were some signs consumers remain cautious. The category that includes major department stores and other general retailers reported flat sales last month.



Economists said the figures suggest consumer spending could rise by 2.5% to 3% in the fourth quarter. That would be only a moderate gain, but above the July-September quarter's 1.8% increase.



The National Retail Federation has forecast that holiday sales will rise 4.1% this year, compared with 2013. That would be the biggest gain in three years.