The U.S. Commerce Department said today that retail sales increased a seasonally adjusted 1.8%, after climbing an unrevised 1.7% in June.

Economists had predicted a 2.2% advance in July sales.

Auto and parts sales soared by 6.7% in July, the biggest increase since a 25.7% advance in October 2001. U.S. automakers reaped blockbuster sales last month thanks to “employee discount” programs for buyers.

Excluding autos, all other retail sales rose 0.3% in July; economists projected ex-autos would climb 0.6%.

Sales rose 0.2% at restaurants and bars, 1% at electronics and appliance stores, 0.5% at sporting goods, hobby and book stores, and 0.6% at health and personal care stores. Sales fell 0.5% at clothing stores, 0.1% at mail order and Internet retailers, and 0.1% at food and beverage stores. General merchandise sales were flat.

Meanwhile, U.S. business inventories didn’t budge in June amid strong sales as the automotive sector slashed stockpiles. Inventories were unchanged at a seasonaly adjusted $1.300 trillion, after advancing an unrevised 0.1% in May, the Commerce Department said.

Separately, the U.S. Labor Department said initial jobless claims dropped by 6,000 to a seasonally adjusted level of 308,000 in the week that ended August 6. The four-week average fell to a five-and-a-half month low of 309,250.