October's Retail Boom

(NECN: Peter Howe, Sharon, Mass.) - In the best report of its kind in seven months, the U.S. Commerce Department said Monday that October retail sales were up 1.2 percent from a month earlier, with auto and truck sales accounting for the bulk of the increase.

All the U.S. economy needs to get healthy fast is a lot more people like Adrienne and Carl Bloom. The couple from New York City just bought a new house in New Jersey and came to Herb Chambers Lexus in Sharon to pick up not just one but two cars, a Honda CRV for Adrienne and an Audi A6 for Carl.

"For us, we found it was a really good time to buy a house and to buy a car. because of the state of economy and I think interest rates being lower,'' Adrienne Bloom said.

Around the Chambers lot on Route 1, these days you see a lot more "sold" tags hanging on vehicles than you did this time last year.

"The recession, I think, for all intents and purposes is over for automobile sales,'' said Herb Chambers Lexus manager Giovanni Tosti. "I think there's a lot of pent-up demand, people have been holding off -- and I think that has ended ... The luxury car and automobile market in general has been a little stagnant for the past year year and half so it's definitely on the rise.''

A big increase in U.S. car sales is the main reason why overall U.S. retail spending -- which powers about 70 percent of the economy -- rose by more in October than it has in months. In fact, two thirds of the increase you can attribute to car and truck sales.

October retail sales, up 1.2 percent from a month earlier, the best increase since March. Auto sales specifically were up 5 percent, making it the best car sales month since "Cash for Clunkers" mania in August 2009. In fact, leave out cars, and sales were up just 0.2 percent. Notably, spending down in home stores and electronic and department stores, but up in bars and restaurants, clothing stores, and online -- the bottom line appearing to be that consumers are picking and choosing some areas where they're willing to spend more, particularly cars, but this is not yet anywhere close to across-the-board spending increases.

"We're seeing a lot of people come in and shop and look and buy and it's wonderful. It's great. I think it's great for all segments of the economy,'' said Tosti, adding that "because of the increase in floor traffic and business," Herb Chambers Lexus is planning to add 15 to 20 sales jobs, a more than 40 percent staff increase.


With videographer Sean G. Colahan