After a strong 1.1 percent month-over-month gain in September, U.S. retail sales increased last month by 0.5 percent to $397.7 billion, the Commerce Department reported today.

Tuesday’s data showed that consumers are beginning to open up their wallets ahead of the holiday season, with electronics and Internet sales leading the way. The report also showed that demand for auto is on the rise.

Auto and parts sales increased 0.4 percent, while overall sales excluding autos were up 0.6 percent.

Sales at electronics and appliance stores jumped 3.7 percent in October, the biggest gain in nearly two years. Non-store retailers, including Internet outlets, realized a 1.5 percent gain in sales.

Also showing gains were sporting good, hobby, book and music stores, which saw sales increase by 1.3 percent. Building and garden retails also showed a 1.5 percent gain.

On a year-over-year basis, retail sales were 7.2 percent above October 2010. Additionally, total sales for the August through October period were up 7.6 percent from the same period a year ago.