U.S. retail sales rose in September as Americans bought more of everything from cars to gasoline and electronics, pointing to stronger-than-expected economic growth in the third quarter.
Other data on Monday showed manufacturing activity in New York state shrank for the third month in a row in October, though the pace of contraction eased.
Retail sales increased 1.1 percent last month, the Commerce Department said, beating expectations after an upwardly revised 1.2 percent rise in August.
Retail sales outside of autos, gasoline and building materials -- a barometer of consumer spending known as core retail sales -- rose 0.9 percent last month.
That was well above the 0.3 percent gain expected by analysts in a Reuters poll, and suggests consumers did more to drive economic growth in the July-September period than economists had expected.
Consumer spending drives about two-thirds of the U.S. economy, and the data points to an economy that is growing modestly but still below its potential.
"This is a good end of third quarter and we have some good momentum to the fourth quarter," said Craig Dismuke, an economic strategist at Vining Sparks in Memphis, Tennessee.
While the unemployment rate fell to 7.8 percent in September -- a potential boost for President Barack Obama's chances of re-election on November 6 -- other measures of labour market health have improved more slowly.
"It's still lacklustre growth," said Stephen Stanley, an economist at Pierpont Securities in Stamford, Connecticut.
The U.S. Federal Reserve last month launched a new open-ended plan to buy mortgage-backed securities until the labour market improves substantially -- an unprecedented step in the history of American monetary policy. The Fed has also pledged to keep interest rates low until even after the economy strengthens.
Sluggish demand and a punishing drought restricted the economy to a 1.3 percent annual growth pace in the April-June period. Before the retail sales report was released, economists were expecting growth to accelerate to a 1.6 percent pace in the third quarter, according to a Reuters poll.
The details of the report showed broad strength across retailers, with sales of motor vehicles and parts up 1.3 percent. Receipts at gasoline stations rose 2.5 percent, reflecting an increase in prices paid at the pump.
Other categories were also strong, with sales at electronics retailers up 4.5 percent. Some analysts said that might reflect sales of Apple's newest iPhone model. Sales at food and beverage stores also posted solid growth, climbing 1.2 percent.
U.S. stock index futures added to gains after the retail sales report, while Treasury debt prices extended losses, sending yields to session highs.
Separately, the New York Fed's "Empire State" general business conditions index rose to minus 6.16, from minus 10.41 in September. Economists polled by Reuters had expected a reading of minus 4.55.
New orders improved to minus 8.97 from minus 14.03, while the index of the number of employees slipped to minus 1.08 from 4.26.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
(Additional reporting by Leah Schnurr and Richard Leong in New York; Editing by Andrea Ricci)