WASHINGTON – Americans spent more money at retailers in September – a buying surge that reflected growing consumer confidence and the launch of the latest iPhone.
Retail sales jumped 1.1 percent last month, producing the best two months of sales in two years, according to figures released Monday by the Commerce Department.
The consumer is back, said Joel Naroff, chief economist at Naroff Economic Advisors. They are not spending money like it is going out of style, but they are spending at a more normal pace that is consistent with a moderately growing economy.
The spike in spending could boost sluggish growth and help revitalize President Obamas election hopes.
The increase follows a survey last week by the University of Michigan that showed consumer confidence rose in early October to a five-year high.
Stocks climbed after the retail report. The Dow Jones industrial average gained 95 points to close up at 13,424. Broader indexes also rose.
Businesses appeared to be banking on a resurgent consumer.
A second Commerce Department report Monday showed companies increased their stockpiles in August by 0.6 percent after a slightly larger gain in July. Companies typically step up restocking when they anticipate sales will rise in coming months.
The retail sales report is the governments first monthly look at consumer spending. Consumer spending is critical because it drives nearly 70 percent of economic activity.
In September, retailers saw gains in almost every major category. That contrasted with Augusts retail sales, which rose almost entirely on the strength of auto sales and higher gas prices.
Chris Christopher, senior economist at IHS Global Insight, said, the introduction of the new Apple iPhone was definitely a factor in September. He estimated 4 million iPhones were sold in the U.S. in the latter half of September.