Sept. 14 (Bloomberg) -- U.S. retail sales excluding autos rose for a fourth month in August, suggesting stronger consumer spending that will help the economy accelerate this quarter.

The 0.2 percent increase followed a 0.3 percent rise in July, the Commerce Department said in Washington. Including vehicles and parts, retail sales fell 0.3 percent after a 0.8 percent July increase that was stronger than first reported.

"Despite the widespread perception that consumers have plunged off a cliff, the underlying pace of spending seems to be holding up fairly well after June's air pocket," said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut.

Job growth accelerated last month, providing more income for consumers to spend. Sales at stores open at least a year so far in September are up 1 percent from the same period in August, according to Redbook Research. Some back-to-school purchases occurred later this year than last, tempering sales at department stores and clothing outlets.

Consumer spending, which accounts for two-thirds of the economy, rose at a 1.6 percent annual rate in the second quarter, the weakest since the 2001 recession. Stanley projects spending will rise at a 3.5 percent annual pace this quarter.

The Commerce Department also reported a record deficit in the second-quarter current account, the broadest measure of trade because it includes investments. The $166.2 billion shortfall is equivalent to 5.7 percent of the economy, up from followed a $147.2 billion, or 5.1 percent, in the first quarter.

The gap reflected a wider trade deficit in goods and services and an increase in income paid to foreigners on their U.S. assets. Economists predicted a deficit of $158.3 billion, based on the median of 40 estimates in a Bloomberg News survey.

Forecasts

The median forecast of 73 economists surveyed by Bloomberg News called for retail sales to drop 0.1 percent in August, after a previously reported rise of 0.7 percent in July. Sales excluding automobiles were expected to rise 0.2 percent after an initially reported increase of 0.2 percent the month before. Treasury notes fell after the retail sales figures eased concern about a slowdown in the economy. The benchmark 4 1/4 percent note maturing in August 2014 fell 1/8, pushing up the yield 2 basis points to 4.15 percent at 10:41 a.m. in New York.

Sales at building material and garden supply stores rose 0.4 percent last month after a 0.6 percent drop in July. Home Depot Inc., the largest U.S. chain of home-improvement supplies, said it froze Florida prices on lumber and tripled lumber inventories at distribution centers in Miami, Tampa and New Orleans in anticipation of the hurricane season.

Back to School

The department reported August gains of 0.1 percent at electronics and appliance stores, 1.4 percent at sporting goods, hobby, book and music retailers, and 0.6 percent at food and beverage stores. Nonstore retail sales, which include Internet purchases, gained 1.7 percent after a 1.3 percent rise in July.

While back-to-school retail sales have increased from a year earlier, retailers are realizing sales gains in September instead of August because the Labor Day holiday weekend occurred a week later this year than in 2003. August department store sales fell 0.8 percent and sales at clothing and accessory stores declined 1.4 percent, the Department said.

"There was a shift in the Labor Day period and that threw us off a little bit," said Terry Lundgren, chief executive officer of Federated Department Stores Inc., in an interview. " I'm still optimistic about the fourth quarter."

Hurricane Frances, which battered Florida for three days during the Labor Day weekend, reduced profit at the Cincinnati- based retailer, which owns Macy's and Bloomingdale's.

Wal-Mart

Wal-Mart Stores Inc., the world's largest retailer, said an increase in purchases of back-to-school clothing is contributing to a gain of 2 percent to 4 percent in sales this month from a year earlier. The Bentonville, Arkansas, company reported a 0.5 percent rise in monthly sales in August, the smallest year-over- year increase in four years.

Sales at automobile dealerships and parts stores fell 1.9 percent last month after rising 2.2 percent in July, the government said. Auto sales slowed to a 16.6 million annual rate from 17.2 million in July, according to Autodata Corp.

Furniture sales fell 0.9 percent after rising 2 percent the month before. Sales at general merchandise stores, which include department stores, dropped 0.4 percent last month.

Furniture Brands International, the biggest U.S. maker of furniture, said in a statement that retail sales over the Labor Day weekend, which ended Sept. 6, were "modestly positive on a year-over-year basis." The St. Louis company said it views the weekend as a good indicator of the fall selling season.

Personal Consumption

Purchases excluding autos and building materials, the category used in the Commerce Department's calculation of personal consumption in its report on gross domestic product, rose 0.2 percent after rising 0.5 percent in July.

Receipts at service stations rose 0.3 percent after a 0.4 percent fall in July. The average price of a gallon of regular gasoline fell to $1.846 in the past week, the lowest in more than four months, the Energy Department said yesterday.

Federal Reserve Chairman Alan Greenspan said last week that the economy is picking up after a "soft patch" in the second quarter that was attributed in part to rising energy prices. "The most recent data suggest that on the whole, the expansion has regained some traction," Greenspan said in prepared testimony to the House Budget Committee.

The economy is forecast to grow at a 3.7 percent annual rate this quarter and 4 percent in the final three months of the year, according to the median estimate in a recent Bloomberg News survey.

Consumer spending is forecast to rise at a 3.3 percent annual rate in the third quarter, based on the median estimate of 56 economists in a Bloomberg News survey.

Job Growth

Employment picked up in August, which is one reason for optimism. U.S. employers added 144,000 workers last month, the most since May and the first time in five months that the pace of job creation picked up. Job creation is essential to spending, since the boost from tax cuts and mortgage refinancing has faded.

Global fund managers' optimism about earnings growth rose this month for the first time this year, a Merrill Lynch & Co. survey showed. About 37 percent of 290 respondents worldwide, who together manage $881 billion in assets, said earnings prospects will improve in the coming year.

Fund managers expect global earnings per share to climb 6.5 percent in the next 12 months, more than the 5.6 percent estimated in August, the brokerage said.

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