Retail sales rose a modest 0.1% in Oct. on low gas prices

Low gasoline prices tempered retail sales in October but a core measure showed  decent gains amid strong job growth.

Sales rose 0.1%, the Commerce Department said Friday, below the 0.3% rise expected by economists.

Excluding volatile autos and gasoline, sales increased 0.3%, close to the 0.4% advance economists projected. But retail sales in September were revised from a 0.1% gain to unchanged.

Sales at gasoline stations fell 0.9% as prices continued to tumble. And auto sales declined 0.5%.

But other discretionary purchases increased at a solid clip. Sales rose 0.4% at furniture stores, 0.7% at health and personal care stores, and 0.4% at sporting goods outlets. Those were partly offset by a 0.4% drop at electronics and appliance stores and 0.4% dip at general merchandise stores.

Consumer spending has been a growth engine this year, stoked by falling pump prices and solid payroll growth that have left shoppers with more cash in their wallets.

Employers added 271,000 jobs in October after employment gains slowed the previous two months. Healthy consumption has offset a strong dollar, global economic troubles and low oil prices, which have hurt manufacturing activity and business investment.

"The improvement in underlying retail sales suggests that the September weakness was just a temporary slump and that the near-term trajectory of consumer spending remains encouraging," economist Steve Murphy of Capital Economics wrote in a note to clients.

Solid retail sales are a big reason many economists expect the Federal Reserve to raise interest rates next month for the first time in nearly a decade. Friday's report could be a key factor as the Fed scrutinizes economic data ahead of its decision at a December 15-16 meeting.