Retail Sales Up Weaker-Than-Expected 0.2% in Sept.

U.S. retail sales rose a slightly weaker-than-forecast 0.2 percent in September after car purchases tumbled, but sales excluding autos were helped by higher gasoline prices, government data showed on Friday.

The Commerce Department (search) said it was not able to pinpoint the impact of hurricanes Katrina and Rita. But it said the effect probably went both ways, with some stores closed by the storms while others recorded stronger sales of supplies in the affected areas.

Wall Street analysts forecast retail sales to rise 0.4 percent in September following an upwardly revised 1.9 percent fall in August. August retail sales had initially been reported as a 2.1 percent decline.

September purchases were held back by a 2.8 percent drop in motor vehicle and parts sales, despite ongoing dealer incentives to boost demand.

But excluding autos, retail sales rose 1.1 percent, compared with expectations for a 0.8 percent advance, building on the 1.0 percent increase in August.

Part of the rise was a pure price effect after the hurricanes drove gasoline prices well above $3 a gallon in many places, while the exodus of millions of motorists from the affected areas pumped up sales.

The Commerce Department said September gas station sales were up 4.0 percent. But retail sales excluding motor vehicles and gasoline were also higher, notching a 0.6 percent advance to match August's gain.

Building material and garden equipment sales were up 1.0 percent with furniture demand increasing 1.2 percent. The U.S. housing market (search) has been rampant thanks to low borrowing costs, buoying prices and breaking records for new home sales.

But some other sources of discretionary spending showed weakness, with clothing sales down 0.2 percent, sporting goods and sales from hobby, book and music stores off 0.9 percent and department stores sales declining 0.5 percent.

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

The Federal Reserve (search) expects U.S. growth to be held back somewhat in the second half of 2005 due to the storms, but then pick up as reconstruction-related spending kicks in.

Wal-Mart Stores Inc. (WMT), the world's biggest retailer, said on Saturday it still expects a 2 percent to 4 percent increase in October sales at U.S. stores. Two of its stores remained closed due to Hurricane Rita as of Saturday, while 11 were still closed due to Hurricane Katrina.