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U.S. consumer spending measure rises, but auto sales tumble

Customers shop next to a sign advertising "Daily Chef," a new proprietary Sam's Club brand, in a Sam's Club store in Bentonville, Arkansas J
Customers shop next to a sign advertising "Daily Chef," a new proprietary Sam's Club brand, in a Sam's Club store in Bentonville, Arkansas J

WASHINGTON (Reuters) - A gauge of U.S. consumer spending rose in September as Americans likely snapped up Apple's new iPhone and bought leisure goods, but falling sales of automobiles pointed to sluggish economic growth during the third quarter.

The Commerce Department said on Tuesday retail sales excluding automobiles, gasoline and building materials, increased 0.5 percent last month after a 0.2 percent gain in August.

The so-called core sales correspond most closely with the consumer spending component of gross domestic product. Core sales last month were boosted by a 0.7 percent advance in receipts at electronics and appliance stores.

Economists polled by Reuters had expected core retail sales to increase 0.4 percent in September.

The increase last month probably reflected sales of Apple's new iPhone. Those sales likely boosted receipts at non-store retailers, mostly Internet sites, which increased 0.4 percent in September. Apple said it sold 33.8 million iPhones in the September quarter.

While Americans bought smart phones, they cut back on automobile purchases, with sales at auto dealers falling 2.2 percent, the biggest drop since October last year.

That pushed down overall retail sales, which fell 0.1 percent in September. It was the first decline since March and followed a 0.2 percent gain in August. Economists had expected retail sales to edge up 0.1 percent last month.

Retail sales excluding automobiles rose 0.4 percent. Households also bought furniture, sporting goods and some building materials and garden equipment. Receipts at service stations were flat. Clothing sales fell 0.5 percent, the biggest fall since April 2012.

While core retail sales implied some strength in consumer spending, that probably will not alter views that economic growth slowed in the third quarter.

Data on home sales, manufacturing production and hiring have all suggested growth took a step back from the second quarter's 2.5 percent annual pace.

(Reporting by Lucia Mutikani; Editing by Krista Hughes)

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