Increased demand for motor vehicles and higher gasoline prices led to the 4.0% sales gain in the automotive sector in October, reports Statistics Canada. Both used and recreational motor vehicle and parts dealers (+3.7%) and new car dealers (+2.8%) enjoyed their largest monthly sales increase in eight months. New car dealers posted good returns from the generous incentive programs aimed at new models in October, especially for passenger cars. Since the beginning of 2004, new car dealers have regained all of the lost sales in the second half of 2003, but were still behind on their year-to-date results. Sales for the first 10 months of 2004 were 1.2% below those reported in the same 10-month period of 2003. Just two months before Christmas, consumer spending in general merchandise stores picked up steam in October (+1.4%), after weaker growth in the previous two months. Sales in general merchandise stores, which had jumped considerably in January due to several department store openings, were 5.9% higher in the first 10 months of 2004 compared with the same period of 2003. Pharmacies and personal care stores continued to enjoy advancing sales in October (+0.6%), leading to a cumulative gain of 7.5% so far in 2004. Of all retail sectors, pharmacies and personal care stores came second after building and outdoor home supplies stores (+9.8%) in terms of year-to-date sales performance in 2004. Retail sales jumped 1.4% to a record high of $29.6 billion in October, mostly due to a rebound in auto sales and price-induced gains at gasoline stations. Excluding sales by retailers in the automotive sector, retail sales were little changed in October (+0.1%). Overall, consumer spending in retail stores has been advancing steadily since the start of 2004, except for a 0.7% decline in April. Prior to 2004, retailers suffered declining sales in each of the last four months of 2003, after experiencing general increases since the fall of 2001. Cumulative retail sales in the first 10 months of 2004 were 4.5% higher compared with the same period of 2003. This increase was similar to the 4.2% growth rate observed in the same 10-month period of 2003, but much weaker than the 7.0% gain seen in the first 10 months of 2002. Once prices are taken into account, retail sales rose 0.9% in October. Higher prices were seen at gasoline stations and food stores, while consumers enjoyed lower prices in computer and home electronics stores. Although retailers in the automotive sector posted by far the most significant sales increase in October (+4.0%), sizable sales advances were also noted in the general merchandise (+1.4%) and pharmacy (+0.6%) sectors. On the other hand, retail sales changed little in the furniture (+0.2%) and food (+0.1%) sectors, while declining in the miscellaneous (-1.9%), clothing (-1.2%) and building supplies (-0.6%) sectors. The miscellaneous sector includes retailers such as office supply, sporting goods, hobby, music and book stores.