U.S. retail sales grew more than expected last month as vehicle sales bounced back from a deep slump, but non-auto sales edged up just slightly, suggesting consumers remain cautious.
Other data on Monday showed New York state manufacturing activity slowed this month, further highlighting the uneven nature of the economic recovery.
The Commerce Department said total retail sales increased 1.4 percent last month after dropping 2.3 percent in September. Excluding autos, sales were up just 0.2 percent after a 0.4 percent rise the prior month.
Analysts polled by Reuters had forecast headline retail sales rising 1.0 percent last month from a previously reported decline of 1.5 percent.
"This is consistent with other data points that show the economy is picking up, though we still have a way to go," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.
A report from the New York Federal Reserve Bank showed a gauge of New State manufacturing activity slowed to 23.51 in November from 34.57 in October, which was a five-year high.
U.S stock index futures pared gains on the data, while Treasury debt prices extended gains.
Retail sales in October were boosted by a jump in new vehicle and parts sales, which surged 7.4 percent.
Auto sales had slumped 14.3 percent the previous month following the expiration of the government's popular "cash-for-clunkers" incentive program in August that had buoyed demand for motor vehicles. Previously, the government had reported auto sales falling 10.4 percent in September.
With government stimulus behind the bulk of the economy's 3.5 percent annualized growth pace in the third quarter, there are fears that rising unemployment will continue to weigh on consumer spending and hold back the recovery.
The economy's growth in the July-September period followed four straight quarters of decline and probably ended the most painful U.S. recession since the 1930s.
Even without the boost from auto sales, there were signs that consumer spending, which normally accounts for about 70 percent of U.S. consumer spending, continued to improve in October, albeit slowly.
Core retail sales excluding autos, gasoline and building materials rose 0.5 percent, advancing for a fourth straight month.
But sales of building materials dropped 2.4 percent last month after falling 0.6 percent in September.
Weak demand for building materials saw Lowe's Cos Inc <LOW.N>, the second-largest U.S. home improvement chain, posting a 30 percent decline in quarterly profit in the July-September period as consumers put off big renovations and as the U.S. housing market recovered only slowly.
Lowe's said it expected sales in stores open more than one year to slide 2 percent to 6 percent in the current quarter. But it noted that it was starting to see optimistic signs in some of the hardest-hit housing markets.
