WASHINGTON — Consumers are giving a modest lift to the economy.
Retail sales rose 0.5 percent from September to October, the Commerce Department said Tuesday.
The month-to-month increase was the fifth consecutively.
Healthy auto sales helped, but even without autos, sales rose by the most since March.
And excluding autos and sales at gasoline stations, sales rose 0.7 percent, also the biggest rise since March.
Sales of electronics, appliances, hardware, and building supplies all benefited from the spending pickup. Sales also rose at grocery stores, bars and restaurants, and health-care stores.
The gains provide an encouraging start for the October-December quarter.
They come just as separate reports show that wholesale prices are flattening and U.S. shoppers are spending more at Wal-Mart Stores Inc., the world’s largest retailer.
Still, consumers might not be able to sustain their spending growth if unemployment stays high and pay raises scant. And Europe may be on the brink of a recession that could further slow U.S. growth next year.
“The consumer has to come through this holiday season if we are going to get back to more decent growth rates, and the early readings are those households have hit the stores quite strongly,” Joel Naroff, chief economist at Naroff Economic Advisors, said.
One positive sign: Inflation pressures are starting to ease, largely because energy costs have fallen.
U.S. firms paid less for wholesale goods last month for the first time since June. And excluding volatile food and energy costs, so-called “core” wholesale prices were unchanged.
Lower prices mean consumers will have more buying power, potentially boosting consumer spending. The jump in gas and food prices earlier this year limited the ability of consumers to buy other goods. That slowed the economy.
Auto sales have rebounded since the Japan earthquake and tsunami. The 0.4 percent rise in October followed a 4.2 percent surge in September.
Purchases of sport utility vehicles and trucks offset a loss in momentum for car sales. The natural disasters had disrupted distribution of parts to U.S. factories and made it harder to obtain some popular models.
However, department stores and specialty clothing shops didn’t fare as well in October.
Megan Dunn, a grad student from Philadelphia, said while she’s buying clothes on clearance, she still goes out for dinner because she enjoys the time with friends.
“Eating out is always going to be expensive,” she said. “But it’s a social experience.”