WASHINGTON_Retail sales outside of autos showed surprising strength in September, but economists worry the rebound in all-important consumer spending will be short-lived as American families contend with rising unemployment and tight credit.

Removing autos, sales rose a better-than-expected 0.5 percent, led by gains at furniture stores, general merchandise stores and specialty clothing stores.

Many economists saw that as a sign that Americans are starting to spend again, a critical development for any recovery since consumer spending accounts for 70 percent of total economic activity.

"American consumers look like they are making their way back. They are cautious but they are no longer panicked," said Mark Zandi, chief economist at Moody's Economy.com. "They are not spending with abandon, but they are spending enough to ensure that the nation's recovery will continue."

Retail sales actually fell 1.5 percent last month, the Commerce Department said Wednesday, a plunge that reflected the end of the government's popular Cash for Clunkers program. Still, that drop was less than the 2.1 percent fall economists expected.

On Wall Street, the better-than-expected retail sales figures and surprisingly strong earnings reports from Intel Corp. and JPMorgan Chase & Co. spurred investors to push the Dow Jones industrial average above 10,000 for the first time this year.

The Dow added nearly 145 points, or 1.5 percent, to 10,015.86. The Standard & Poor's 500 index rose 18.83, or 1.8 percent, to 1,092.02, and the Nasdaq composite index rose 32.34, or 1.5 percent, to 2,172.23.

Sales at gasoline stations jumped 1.1 percent last month. Even with recent increases, gas prices are still well below the peaks of 2008. Compared with September 2008, consumers spent an estimated $3.25 billion less per week to gas up their cars, giving them money they can spend elsewhere.

Those margins have begun to narrow because at this time last year, retail gasoline prices were in free fall. Prices right now have stabilized around $2.50 per gallon. Still, Americans are spending $1.8 billion less per week now on gasoline.

But economists cautioned that consumer spending is unlikely to jump in coming months as households contend with rising unemployment, which now stands at a 26-year high of 9.8 percent, as well as tighter standards on bank loans and credit cards. The national jobless rate is not expected to peak until reaching 10.3 percent or higher next summer.

"With household finances likely to remain constrained by falling employment, declining real incomes and tight credit, we doubt that consumption will continue to grow at such rates," said Paul Dales, an economist at Capital Economics.

The overall economy, which slumped into a recession in December 2007, likely emerged from the downturn during the summer, helped by government stimulus efforts including the clunkers program.

The economy, as measured by the gross domestic product, likely increased at an annual rate of around 3 percent in the July-September quarter. Many analysts expect similar growth in the current quarter before it tapers off to half that amount in the first half of next year.

Analysts had expected increases at general merchandise stores following reports last week from the nationwide retailers that sales grew in September at stores open at least a year compared with activity in September 2008. It marked the first year-over-year rise in sales after more than a year of declines, according to data from the International Council of Shopping Centers and Goldman Sachs.

The data from ICSC-Goldman Sachs, however, represents a sliver of spending, excluding business from autos, gasoline and building materials. With Wal-Mart Stores Inc. no longer participating in the industry roundup, it's also becoming more of a gauge of discretionary spending than the economy overall.

Shoppers are hungry for markdowns, looking for sales signs at stores, while cashing in on a tax credit for first-time homebuyers and low mortgage rates and home prices. A late Labor Day and delayed school openings also helped retailers last month because consumers purchased some items in September that they would normally have bought in August.

The big boost in sales at stores opened at least a year in September, however, was mainly because the figures are being compared with a year ago when sales went into freefall.

Kohl's Corp. department store chain, Limited Brands Inc., which runs Victoria's Secret and Bath & Body Works, and accessories chain The Buckle Inc. all said their September sales rose at stores open more than a year. J.C. Penney Co., Macy's Inc. and Target Corp. reported their same-store sales fell, but not as much as they had expected.

Also Wednesday, the Commerce Department said businesses slashed their inventories 1.5 percent in August, the 13th straight decline, the longest stretch of inventory cutbacks since the 2001 recession. Economists, however, believe businesses will soon switch to restocking which will mean higher factory production in coming months, another development expected to support a recovery.

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AP Retail Writer Anne D'Innocenzio in New York contributed to this report.

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