American consumers crowded new-car showrooms in October, recovering from the shock of the Sept. 11 terrorist attacks to take advantage of financing deals and driving retail sales up at a record pace, according to a government report released on Nov. 14.

The U.S. Department of Commerce report said total retail sales surged by 7.1 percent to a seasonally adjusted $306.83 billion, the strongest increase for any month since records were started in the late 1960s, after shrinking by 2.2 percent in September.

Zero percent financing offered by U.S. car manufacturers and cut-rate deals offered by some foreign companies in response made the unexpectedly strong retail jump possible, according to analysts.

New-car sales skyrocketed a record 26.4 percent to $87.4 billion after declining 4.5 percent in September.

In the wake of the Sept. 11 terrorist attacks, General Motors Corp. initiated a "Keep America Rolling" program, offering zero percent interest financing on its cars and trucks. Ford Motor Co. and DaimlerChrysler AG were forced to reluctantly respond in order to compete, though analysts say the financing deals are very expense for all three companies.

Excluding autos, retail sales rose 1.0 percent last month after dropping 1.5 percent in September. But both with and without cars, retail sales exceeded analysts' forecasts.

The bounce in consumer activity is one gauge of the economy's resilience, according to analysts.

Still, analysts said the unexpectedly strong sales figures did not change the picture of an economy that is contracting and which also suffered a blow to confidence from the terrorist attacks on the World Trade Centre and the Pentagon.

The U.S. economy shrank at a 0.4 percent annual rate in the third quarter and is expected to keep contracting in the current fourth quarter, thus meeting the generally accepted definition of a recession in which national output weakens for two consecutive quarters.

But the consumer boom may mean that any recession will be relatively brief, according to analysts.

The Bush administration has injected about $55 billion of direct aid into the economy since the terrorist attacks, aiding New York City and selected industries like airlines, while Congress is still hashing out another stimulus package worth up to $100 billion.

The National Association for Business Economics predicted in a survey issued on Wednesday that the massive fiscal stimulus combined with 10 U.S. interest-rate cuts this year by the Fed will hasten a recovery in 2002.

"The Sept. 11 attacks pushed the U.S. economy into a recession that will be mild both in depth and duration," NABE president Harvey Rosenblum said, adding that the group expected a recovery to begin in the first half of next year.