The solid performance of auto sales in October helped U.S. retail sales grow at their strongest rate since March 2010. Excluding auto sales, the gains were modest, the Commerce Department’s U.S. Census Bureau reported Monday.

Despite the unemployment rate remaining unchanged for the third straight month in October at 9.6 percent, retail sales rose 1.2 percent, marking the fourth consecutive month of strong growth in retail sales. The gain also was double what had been expected.

“Today’s retail sales data continues to show improving consumer confidence in the economic recovery,” U.S. Commerce Secretary Gary Locke said. “Over the past month, we have seen a series of positive economic reports, including new-car sales, manufacturing and employment.”

Motor vehicle sales increased a strong 5 percent in October, the largest gain since March. Excluding auto, retail sales rose 0.4 percent, which was on par with expectations.

October's retail sales report showed gains across most categories, offering hope that consumers will support the economy despite a still sluggish job market. The only encouraging news on the jobs front is the net gain of 151,000 jobs seen in October, the first increase since May.

The government also reported that inventories held by businesses grew 0.9 percent from August to September, and 6.3 percent from September 2009. Inventories held by auto dealers, which also includes parts dealers, grew 1.7 percent from August to September and 18.1 percent from September 2009.

“As we approach the holiday season, private-sector forecasts show that U.S. retailers will see a boost in sales,” said Locke. “While the data and private-sector expectations are encouraging, we realize there's still more work to do to help put people back to work in good-paying jobs.”

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