Retail sales in the U.S. rose more than forecast in September, easing concern slumping confidence and scant hiring will derail the biggest part of the economy. The 1.1 percent advance, the biggest since February, followed a 0.3 percent gain for August, a stronger performance than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg News called for a 0.7 percent rise in purchases last month. Macy’s Inc. (M) and Kohl’s Corp. (KSS) are among retailers planning to boost hiring heading into the year-end holidays, even as gains in payrolls are too small to reduce unemployment. President Barack Obama, lawmakers and the Federal Reserve face pressure to spur the jobs needed to support household spending, which accounts for about 70 percent of the world’s largest economy. “Consumer spending ended the third quarter on a pretty positive note,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “We have decent momentum heading into the fourth quarter.” Economists’ estimates in the Bloomberg survey ranged from gains of 0.2 percent to 1.6 percent. The Commerce Department revised the August figure from no change. Ten of 13 major categories showed increases last month, led by auto dealers and clothing stores. Auto Dealers Purchases at automobile dealers climbed 3.6 percent, the most since March 2010, today’s report showed. The results are in line with industry figures. Cars and light trucks sold at a 13.1 million seasonally adjusted annual rate in September, according to Woodcliff Lake, New Jersey-based Autodata Corp. The rate was the highest since April’s 13.2 million, when lost output caused by Japan’s earthquake and tsunami began crimping supply of cars and parts. Purchases excluding autos increased 0.6 percent, today’s report showed. They were projected to rise 0.3 percent, the survey median showed. Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales also rose 0.6 percent, the most since March, after a 0.4 percent August increase. Consumers, for now, are weathering a stagnant job market. Payrolls last month climbed by 103,000 workers, reflecting the end of a strike at Verizon Communications Inc. that brought 45,000 people back to work, Labor Department figures showed earlier this month. The unemployment rate was 9.1 percent in September for a third month. Challenge for Consumers “The U.S. has a long-term issue with unemployment that for the average consumer is going to remain challenging,” Blake Jorgensen, chief financial officer for Levi Strauss & Co., said in a telephone interview this week from San Francisco, where the closely held company is based. “We’re remaining cautious.” Persistent joblessness, the real-estate slump and a volatile stock market will limit retail sales growth to 2.8 percent during the holiday season this year, according to the National Retail Federation. The gain compares with a 5.2 percent jump last year and a 10-year average of 2.6 percent, the Washington based NRF said last week. Stores may hire 480,000 to 500,000 seasonal workers, in line with the 495,000 added last year, the group said. Macy’s, the second-biggest U.S. department-store chain, is increasing hiring of mostly part-time workers by 4 percent for the holiday season to match sales growth in its stores and online. Kohl’s, the fourth-largest U.S. department-store chain, said last week it may hire more than 40,000 holiday workers, a 5 percent increase from 2010. “Households have been very cautious in their spending decisions,” Fed Chairman Ben S. Bernanke said Oct. 4 in congressional testimony. “Probably the most significant factor depressing consumer confidence, however, has been the poor performance of the job market.” To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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