WASHINGTON

US retail sales recorded their biggest increase in two and a half years in September likely as reconstruction and clean-up efforts in areas devastated by Hurricanes Harvey and Irma boosted demand for building materials and motor vehicles.

The Commerce Department said on Friday retail sales jumped 1.6 per cent last month also buoyed by a surge in receipts at services stations, which reflected higher gasoline prices after Harvey disrupted production at oil refineries in the Gulf Coast.

Last month’s increase in retail sales was the largest since March 2015. Data for August was revised to show sales slipping 0.1 per cent instead of the previously reported 0.2 per cent drop.

Retail sales increased 4.4 per cent on an annual basis.

Economists polled by Reuters had forecast retail sales jumping 1.7 per cent in September.

Harvey and Irma ravaged parts of Texas and Florida when the storms made landfall in late August and early September. Sales at gardening and building material stores increased 2.1 per cent last month, the biggest increase since February, and followed a 0.6 per cent rise in August.

Receipts at auto dealerships soared 3.6 per cent likely as residents replaced flood-damaged motor vehicles. That was the largest rise since March 2015 and followed a 2.1 per cent decline in August.

Retail sales were also lifted by a 5.8 per cent surge in receipts at service stations. The increase was the largest since February 2013 and followed a 4.1 per cent gain in August.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.4 per cent last month after being unchanged in August.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

The rebound in core retail sales suggests the drag on the economy from the hurricanes will probably be modest.

Economists estimate the storms could subtract at least six-tenths of a percentage point from third-quarter GDP growth.

The economy grew at a 3.1 per cent annualised rate in the April-June period.

Sales at electronics and appliance stores fell 1.1 per cent last month and receipts at clothing stores rose 0.4 per cent.

Department store retailers are being squeezed by declining shopping mall traffic and increased competition from Amazon.com and other online retailers.

Sales at online retailers climbed 0.5 per cent in September.

Receipts at restaurants and bars jumped 0.8 per cent and sales at sporting goods and hobby stores fell 0.2 per cent.