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Associated Press
Updated: 9:10 a.m. ET Sept. 14, 2005

Drop in auto sector slams August retail sales
Total sales fell by 2.1 percent, double the decline analysts had expected

WASHINGTON - Retail sales plunged in August by the largest amount in nearly four years, evidence that the economy was weakening even before Hurricane Katrina struck.
The Commerce Department reported Wednesday that total sales fell by 2.1 percent last month, double the decline that analysts had been expecting. The weakness came from a big 12 percent drop in sales of autos. Excluding autos, retail sales rose 1 percent, but much of that strength reflected a rise in gasoline prices.
Economists believe that Katrina, the worst natural disaster to hit the United States, could trim economic growth by a full percentage point in the second half of the year as soaring gasoline prices force consumers to cut back The 2.1 percent drop in total sales last month was the largest decline since a 2.9 percent plunge in November 2001, the period following the 2001 terrorist attacks.

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