Gas Prices Fuel Slight Increase in Retail Sales : Economy: Excluding prices at the pump, business was off 0.1% amid signs of fading consumer confidence.

Retail sales inched up 0.1% in October, fueled for the third straight month by the high cost of gasoline, the government said today. Excluding gasoline, sales fell 0.1% amid continuing signs of fading consumer confidence.

The Commerce Department said sales totaled a seasonally adjusted $152.3 billion, up from $152.1 billion in September.

The revised 1.3% gain in September was a bit stronger than the 1.1% increase originally reported. But excluding the gasoline impact, sales were up only 0.9% that month.

Many analysts now believe that the U.S. economy is in a recession that could be intensified by a drop in personal consumption. Retail sales represent about half of all consumer spending, which itself accounts for two-thirds of the nation’s economic activity.

The department said retail sales since August have been artificially inflated by gasoline prices that surged after Iraq invaded Kuwait on Aug. 2 and disrupted world petroleum markets--not by increased sales volume.

Analysts say consumers have become cautious in their spending in recent months after fears of war in the Persian Gulf added to their anxiety over the weakening economy.

The Conference Board, a New York business research organization, reported that consumer confidence in the economy plunged in October to the lowest level since the 1981-82 recession.

Sales at department stores, a key barometer of consumer sentiment, were off 0.6% after falling 1.1% in September.

Automobile sales, which have been choppy through much of the year, slowed to a 0.7% gain from a 2.9% advance the previous month.

Excluding the automobile category, sales were unchanged from the previous month.

Sales of durable goods, which include cars and other items expected to last more than three years, were up 0.7% after a 1.4% increase in September.

Besides autos, other components of the durable category were mixed. Sales of furniture and other home furnishings fell 0.3%, while building materials jumped 1.5%.

Non-durable goods, which include food and gasoline, slipped 0.2% after a 1.2% gain a month earlier.

Except for a 1.6% increase in drugstore sales, all other categories dropped--grocery stores down 0.5%, clothing stores down 1% and restaurants and bars off 0.3%.