14 October 2011 Last updated at 12:25 ET

US retail sales in strong September growth

Grocery stores bucked the sales rise trend

US retail sales rose at a faster-than-expected pace in September, offering signs of hope to the country's economy.

Sales were up by 1.1% over the previous month, beating economists' forecasts.

That is the biggest gain in seven months, according to seasonally adjusted data from the US Department of Commerce.

Excluding vehicle sales the data suggests a 0.6% gain. For the year as a whole total sales registered a 7.9% improvement.

Not all sectors reported better numbers. Grocery stores recorded a 0.3% monthly drop in sales. Sporting goods, hobby, book and music stores reported a similar fall.

Their numbers were offset by a 4% rise in sales reported by motor vehicle dealers.

"Retail sales may have received some boost following Hurricane Irene but this appears to be a solid report," said Ryan Sweet at Moody's Analytics.

"All told, real spending will rise in September, which sets us up well for growth this quarter."

The data is closely watched because consumer spending accounts for 70% of US economic activity.

A separate report showed US business inventories increased by 0.5% in August. It is the 20th consecutive month that stockpiles have risen.

It is another sign that confidence is building as it suggests companies expect demand will continue to improve.

US business inventories totalled $1.54tn for the month, which is nearly 17% higher than their low in September 2009.