US consumers boost spending in September US retail sales beat expectations in September as consumers felt more confident about spending, particularly at car dealerships and electronic outlets, giving some support to the most vital sector of the economy. The 1.1 per cent sales gain followed an upwardly revised 1.2 per cent increase in August, according to the commerce department. This was sizeably above expectations for a 0.7 per cent monthly lift. August and September marked the first back-to-back monthly retail sales gains exceeding 1 per cent since late 2010. The increase in consumer spending, which accounts for more than two-thirds of the economy, reflects increased confidence about the economic recovery on the back of improvement in the labour and housing markets. "Households appear to be reducing their saving rate in order to fund spending," said Gus Faucher, senior economist at PNC. The improvement in the housing market is boosting sales growth, and higher stock and home prices are also supporting consumers. The need to replace older vehicles is another positive for near-term consumer spending. However, rising energy costs and concerns surrounding a slowdown in China, a recession in Europe and looming tax changes at the end of the year may hold some consumers back in the coming months. Nearly all the major retail categories showed gains in September, led by car dealers, service stations and electronics stores. Sales climbed 1.3 per cent at automobile dealers, after a 1.8 per cent increase the prior month. Excluding autos, retail sales rose 1.1 per cent, the most since January. This beat forecasts of a 0.7 per cent rise. Data from service stations probably reflected an increase in petrol prices. A gallon of regular fuel at the pump cost roughly $3.83 in September, the highest level since April and up 13 cents from August, said AAA, the US motoring group. "The report really solidifies the second quarter as a soft patch, with this better consumer news in the third quarter and gives spending a good jumping-off point for the fourth quarter," said Jonathan Basile, director of US economic research at Credit Suisse. Electronics dealers reported a 4.5 per cent jump in sales, the biggest increase since October 2011, buoyed by the launch of Apple's iPhone 5 at the end of September. Similarly, non-store retailers, which include online merchants, may have also benefited, leading to a 1.8 per cent gain in receipts. Spending at clothing stores rose 0.6 per cent and 0.3 per cent at general merchandise stores. Furniture sales and sales of building materials were up for the third consecutive month. A separate data release showed factory activity in the New York area contracted at a less severe pace in October than the month before. The New York Federal Reserve's Empire State manufacturing index, which covers production in New York, northern New Jersey and southern Connecticut, posted a negative reading of minus 6.16. This was an improvement from September's level of minus 10.41, the lowest level since April 2009. Analysts had forecast a level of minus 3. Readings above zero indicate expansion. The survey of roughly 175 manufacturing executives, which serves as one of the earliest monthly guideposts to US factory conditions, showed the new orders component is at minus 8.97, better than September's minus 14.03 Manufacturing has faltered in recent months on the back of global economic uncertainty that has kept businesses from placing more orders at factories.