Online purchases boost U.S. retail sales; labor market recovering - Reuters

The surprise rebound in retail sales reported by the Commerce Department on Thursday defied slumping consumer confidence.

Data for July was revised down to show retail sales declining 1.8% instead of 1.1% as previously reported.

Economists polled by Reuters had forecast retail sales would drop 0.8%.

Retail sales are mostly goods, with services such as healthcare, education, travel and hotel accommodation making up the remaining portion of consumer spending.

Online retail sales rebounded 5.3% after tumbling 4.6% in July.

But sales at auto dealerships tumbled 3.6% after declining 4.6% in July.

Restaurants and bars are the only services category in the retail sales report.

Excluding automobiles, gasoline, building materials and food services, retail sales rebounded 2.5% last month after a downwardly revised 1.9% decrease in July.

The National Retail Federation said the rise in sales despite the headwinds reflected the continued strength of the American consumer and the resilience of the nation's retailers.

A separate report from the Labor Department on Thursday showed initial claims for state jobless benefits rose 20,000 to a seasonally adjusted 332,000 for the week ended Sept.

A fourth report from the Commerce Department on Thursday showed inventory accumulation slowed in July.

But after the release of the retail sales report on Thursday, economists at Morgan Stanley raised their third-quarter GDP growth estimate to a 5.0% rate from a 3.3% pace