Wall Street has made some gains in the opening session of the new week's trading today (October 15th), thanks to fresh data revealing retail sales in the US did better than expected in September.
According to the Commerce Department, purchases rose by a larger-than-anticipated 1.1 per cent last month, as consumers managed to shake off fears of the economic downturn and continued to spend after holding back on splashing the cash earlier in the year.
Additionally, compared to a year earlier, sales rose 5.4 per cent and sales for the quarter ending in September were up 4.8 per cent compared to the third quarter in 2011.
The new data came as the government unit revised August 2012's increase in retail sales to 1.2 per cent from an earlier estimate of 0.9 per cent, which means the jump in August was the largest monthly gain since October 2010.
Advances made in August and September reversed slower expenditure between January and July 2012, including month-over-month falls in consumer spending of 0.5 per cent in April, 0.1 per cent in May and 0.7 per cent in June.
Economists had originally anticipated last month's retail sales would increase by a more modest 0.8 per cent, according to a survey conducted by Bloomberg.
Among the reasons behind this buoying of retail sales news is the fact auto sales have climbed, with the carmaking sector helping to boost overall figures for two months in a row – but even discounting vehicles, retail sales were up 1.1 per cent in September.
All this is good news for the economy, because consumer spending drives some two-thirds of economic growth – and this latest batch of data indicates a modest rebound after a disappointing summer.
However, even with this uptick in growth, the US Federal Reserve is unlikely to reduce its support for the economy any time soon, launching a fresh open-ended bond-buying plan in September and pledging to keep interest rates low until after the economy has recovered.
At 16:30 BST, the Dow Jones Industrial Average rallied by 0.2 per cent to an index value of 13358.0 points, while its neighbour the Nasdaq advanced by 0.1 per cent to an index value of 3047.9 points.
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