Consumers, drawn by favorable financing and heavy discounting, boosted retail sales in October by 7.1%, the biggest one-month gain ever recorded. The jump in sales at the nation's retail stores came after consumers cut back on their spending in September, pushing sales down 2.2%, the Commerce Department reported Wednesday. Much of the strength came from a record 26.4% increase in car sales, which have been boosted by zero-percent financing and other incentives. That follows a 4.5% decline in September. Excluding autos, retail sales rose 1.0% in October. 
Consumers, whose spending accounts for two-thirds of all economic activity, have been a main force keeping the economy out of recession. But economic fallout from the Sept. 11 terror attacks have probably made a recession this year unavoidable, economists say.
In an effort to prevent the economy from sinking deeper into recession, the Federal Reserve has cut interest rates 10 times this year, with three of the reductions coming after the attacks.
Congress, meanwhile, is working on a plan to stimulate the economy through new tax cuts and increased government spending.
The economy shrank at a 0.4% rate in the third quarter and many economists are predicting an even bigger drop in the current quarter, thus meeting a common definition of a recession: two consecutive quarters of declining economic output.
With unemployment rising and fears about anthrax in the mail and further terror attacks, economists worry that consumers might pull back, making the economy even weaker.
To revive sagging sales, retailers have heavily discounted merchandise and offered other incentives. Car makers and dealers have provided free financing, which was a big factor in soaring car sales last month, economists say.

Sales at clothing stores increased 6.9%, erasing a 5.9% drop in September.
At building and garden supply stores, sales jumped 2.8% in October, after falling 2.6%. 
At health and beauty stores, sales rose 1.7%, after a 0.3% rise.
Sales of sporting goods, books and music rose 3%, following a 2.2% decline. 
Sales of electronics and appliances rose 0.7%, after a 1.4% drop.
Bar and restaurant sales grew 1.4%, after falling 2.5%.
Sales at furniture and home furnishing stores, however declined by 0.5%, after an even bigger 4.2% decrease. 
Lower pump prices sent sales at gasoline stations down 6.4%, following a 2.8% increase.
The 7.1% increase in total retail sales in October was the largest since the government began keeping retail sales records under the current classification system in 1992.
Last week, the nation's biggest retailers reported generally disappointing sales. But discounters and other value-oriented stores continued to be the beneficiaries of consumers' frugality.
Copyright 2001 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.