Retail sales up on auto demand

Washington -- The U.S. Commerce Department reported that retail sales rose 0.3 percent in August, lower than expected, an increase led by a 2.8 percent jump in auto sales, the biggest increase since July 2006.

But, reports said, apart from motor vehicles and parts, August retail sales fell 0.4 percent, the sharpest drop since September 2005.

It was seen by some observers as a troubling sign for consumer spending in a time of adverse credit conditions, the Wall Street Journal said.

In a separate report, Commerce said the U.S. current-account deficit narrowed last spring as overseas sales climbed for cars, farm products and industrial goods.