U.S. retail sales increased a seasonally adjusted 1.4 percent in October, led by a rebound in auto sales from a post-“cash-for-clunkers” slump, the U.S. Commerce Department said today.

Excluding the 7.4 percent increase in auto sales, retail sales rose 0.2 percent in October, the data showed. Sales excluding autos have risen three months in a row and in five of the past six months, MarketWatch reported.

Auto sales had dropped 14.3 percent in September on the heels of the expiration of the government’s cash-for-clunkers program.

However, the rise in auto sales in October indicates that the clunkers subsidy didn’t capture all of the pent-up demand for this year. Economists are predicting that consumer spending will add to U.S. economic growth again in the fourth quarter, despite significant obstacles, such as the weak job market, little wage growth and the desire by consumers to save more and borrow less.

Compared with last October, retail sales were down 1.7 percent to $347.5 billion, while sales excluding autos were down 2.6 percent to $288.5 billion.

Through the first 10 months of 2009, sales have totaled $3.38 trillion, down 8.2 percent compared with the same period a year earlier.

The 1.4 percent gain in October was higher than the 1 percent forecast by economists, but a downward revision to September’s sales offset the upside surprise. Economists surveyed by MarketWatch had been expecting sales excluding autos to rise 0.3 percent, close to the 0.2 percent reported by the government.

The retail sales report is subject to large revisions as the government receives more complete data from a large sample of retail outlets.