U.S. retail sales dropped by a larger-than-expected 2.1 percent in August, the sharpest drop in almost four years, after car purchases collapsed from July's near-record level, government data showed on Wednesday.

Sales excluding autos were buoyed by high gasoline prices, however, climbing a stronger-than-expected 1.0 percent.

The Commerce Department said it could not quantify the impact of Hurricane Katrina (search) but said it would have been small because the storm-affected region accounted for little more than 1 percent of total national sales.

"Moreover, the effect of the hurricane on the national retail sales estimates in August would be much less, since the hurricane only impacted the last few days of August," the department said in a statement, noting that it had to estimate some of the results for August because some firms had problems in reporting.

Wall Street (search) analysts forecast retail sales to decline 1.2 percent following July's 1.8 percent gain. But sales were held back by a record 12.0 percent drop in motor vehicle and parts sales, despite continued heavy discounting by dealers.

Retail sales outside of the auto sector rose 1.0 percent, compared with expectations for a 0.5 percent advance, after a revised 0.5 percent gain in July. This was initially reported as up 0.3 percent.

But much of the rise was a pure price effect after gasoline spiked higher, a gain that continued into September after the hurricane drove gasoline prices well above $3 a gallon in many places.

The Commerce Department (search) said August gas station sales were up 4.4 percent. Retail sales excluding motor vehicles and gasoline gained 0.5 percent following an unchanged reading in July, it said.

Analysts fear high energy prices could sap consumer spending, on top of any negative fallout from Katrina, although the economic evidence so far has been mixed.

Wal-Mart Stores Inc (WMT.N), the world's biggest retailer, on Friday reported strong demand for hurricane-related merchandise. It repeated its September forecast of 2 percent to 4 percent sales growth, but warned this was subject to revision because of oil prices and the hurricane.

Furniture sales delivered a solid 0.9 percent advance in August while building materials and garden equipment grew by 0.5 percent. The U.S. housing market has been rampant thanks to low borrowing costs, buoying prices and breaking records for new home sales.