Retail sales bounced back last month after a disappointing September drop, providing positive consumer-spending momentum heading into the holiday shopping season.
Sales increased 0.3% in October after decreasing 0.3% the previous month, the Commerce Department said Friday.
Analysts had expected sales to increase 0.2% last month.
Lower gasoline prices helped put consumers in the spending mood, said Jack Kleinhenz, chief economist at the National Retail Federation.
"A boost from plunging gas prices and accelerating job growth, combined with wage and salary gains and rising stock prices are making consumers a bit more willing to spend," he said.
But falling gas prices also pushed down the overall retail sales totals, which include gas purchases.
Sales at gas stations were down 1.5% in October from the previous month as the average nationwide cost of a gallon of regular unleaded gas fell below $3.
Excluding gas purchases, retail sales were up 0.5% in October, said Chris Rupkey, chief financial economist at Union Bank.
"Whenever you hear someone talking about how slow growth is out there in the economy, you can always bring up how well actual cash register sales are doing at retailers, how much consumers are actually buying," he said.
"We believe the stock market gains and the gasoline price tax cut for consumers are going to push retail sales even faster as we head into the holiday season," he said.
But although the increase in retail sales was a positive for the economy, consumers still are not spending robustly, said Lindsey Piegza, chief economist at brokerage Sterne Agee.
"Consumers continue to spend, but at a modest level with no sign of further momentum in sight with income growth stubbornly limited," she said.