By Amara Omeokwe and Sarah Chaney

WASHINGTON--Americans spent more on shopping in October, signaling consumer spending remains on solid footing.

Retail sales-a measure of purchases at stores, at restaurants and online-rose a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal expected a 0.2% increase. The rise in October follows a drop in September, when sales fell 0.3%, the same as previously estimated.

Spending at gas stations was up 1.1% during October, helping drive the overall advance in sales last month.

Meanwhile, spending on big-ticket items was mixed. Vehicle sales were up 0.5%, while furniture and home furnishing sales dropped 0.9%, the biggest monthly decrease since December 2018, according to the Commerce Department.

Excluding vehicles and gasoline, categories that are often volatile, October sales were up 0.1%.

Retail sales can be volatile month to month, but October's overall gain stands in line with the larger trend this year. Sales in the August through October period increased 1.1% compared to the previous three months, and sales were up 3.1% in the first 10 months of 2019 compared to the same period last year.

The increase in retail sales suggests consumers continue to hold up well, despite lingering global trade tensions and a broader slowdown in the manufacturing sector across the U.S. and Europe. Consumer spending accounts for more than two-thirds of U.S. economic output, and has helped support the U.S. economy this year. A steady labor market, combined with muted inflation and gains in earnings have encouraged Americans to spend. The unemployment rate is hovering near a 50-year low and average hourly earnings increased by 3% in October from the prior year, according to the Labor Department. A recent University of Michigan consumer sentiment survey found Americans had higher expectations for future economic conditions in early November than at October's end.

Cynthia Phillips Strinich, co-owner of Phillips Toy Mart in Nashville, Tenn., said business is stable and sales this year have been consistent with 2018-a trend she expects to continue into the holiday shopping season.

"We've had a cold snap and when that happens that really seems to put people in the mood and they are really starting to buy," Ms. Strinich said. "We had a great [holiday season] last year, and I think we will again."

Walmart Inc., the nation's largest retailer, reported earnings Thursday that beat most Wall Street analysts' expectations, as sales in stores and online grew during the company's third quarter compared to the same period last year. Brett Biggs, Walmart chief financial officer, said in prepared remarks that customers' economic health appears "solid."

Sales at U.S. nonstore retailers-a proxy for purchases made online-were robust in October, rising 0.9% from the previous month and 14.3% from the prior year, the Commerce Department's report showed. Online shopping is expected to be a strong driver of holiday sales this year, with more than 41% of consumers planning to make at least half of their purchases online, according to the Conference Board, a research group.

"This holiday season has all the makings of a good one," said Lynn Franco, senior director of economic indicators at the Conference Board, in a statement. "Consumers are gearing up for the holidays, with signs indicating they will not reign in their spending."

The holiday shopping period is shorter this year, however, with Black Friday falling a week closer to Christmas than in 2018. That gives retailers less time to entice shoppers to make purchases.

The Commerce Department's retail sales report can be found at http://www.census.gov/retail/marts/www/marts_current.pdf.

(END) Dow Jones Newswires

November 15, 2019 08:45 ET (13:45 GMT)

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