Consumer demand buoys Sept. sales

Americans snapped up goods from cars to iPhones in September, showing that consumer demand was heading into the holidays on a high note.

The 1.1 percent advance followed a revised 1.2 percent increase in August, the best back-to-back showing since late 2010, Commerce Department figures showed Monday.

"This keeps the economic expansion moving forward," said Dean Maki, chief U.S. economist at Barclays P.L.C. "Consumer spending is continuing to grow solidly."

Gains were broad-based, with 12 of 13 retail categories showing an improvement, as shoppers were heartened by higher stock prices and home values. Faster payroll growth would further boost the consumer spending that's needed to offset a slowdown in business investment, Maki said.

Other reports Monday showed that inventories in the United States rose at a slower pace in August, indicating that the unexpected strength in sales may be starting to drain stockpiles, and manufacturing in the New York region contracted in October for the third straight month.

Economists' estimates for retail sales in the Bloomberg survey ranged from gains of 0.3 percent to 1.3 percent. The reading for August was revised from an initially reported increase of 0.9 percent.

Sales climbed 1.3 percent at auto dealers, after a 1.8 percent increase the prior month, the retail report showed. Cars and light trucks sold at a 14.9 million annual pace in September, the most since March 2008, according to Ward's Automotive Group.

Retail sales excluding autos increased 1.1 percent, the most since January, the report showed. Electronics dealers showed a 4.5 percent jump in sales, the biggest gain since October 2011.

Apple's iPhone 5 became available Sept. 21 in the United States, and more than five million units sold in the first three days, surpassing a record set last year by the previous model.

Non-store retailers, which include online merchants, may have also benefited from demand for the new iPhone, leading to a 1.8 percent gain in receipts.

Clothing stores racked up a 0.6 percent increase in sales last month, the report said. Retailers may have benefited from a last-minute rush for back-to-school items, with September same-store sales topping analysts' estimates at discount and specialty-apparel chains.

Target Corp., the second-biggest U.S. discounter, had a 2.1 percent gain from a year earlier. TJX Cos., owner of T.J. Maxx and Marshalls, reported a 6 percent increase.

Excluding autos, gasoline, and building materials, sales climbed 0.9 percent, the best performance since July, after a 0.1 percent gain the previous month.

U.S. companies boosted inventories by 0.6 percent in August, after a 0.8 percent gain in July. Commerce Department data showed. Sales at factories, wholesalers, and retailers climbed 0.5 percent after advancing 0.9 percent the prior month.