- Associated Press - Thursday, January 12, 2012

WASHINGTON (AP) — Retail sales barely rose in December, but the gain was enough to lift sales to a record level for 2011. It marked the largest annual increase in more than a decade.

Sales inched up 0.1 percent in December to a seasonally adjusted $400.6 billion, the Commerce Department said Thursday. It was the second straight month that sales topped $400 billion. Never before have monthly sales reached that level.

The government revised the November sales to show a stronger 0.4 percent gain — twice the original estimate. That increase pushed sales in November above $400 billion on a seasonally adjusted basis.

For all of 2011, sales totaled a record $4.7 trillion, a gain of nearly 8 percent over 2010. It was the largest percentage increase since 1999

Steady sales gains have fueled a 20 percent surge from the low during the recession. Monthly sales are even 6 percent above their pre-recession high.

The figures confirm evidence that the economy was strengthening as 2011 ended.

One caveat: Many retailers said they had to offer steep discounts in December to attract holiday shoppers.

Those discounts showed up in weaker department-store sales, which fell 0.2 percent in December. A broader category that includes department stores such as Macy’s and big chains such as Wal-Mart and Target showed an even larger decline last month: 0.8 percent.

“Although consumer spending is not particularly robust, households do continue to spend and provide moderate support for the overall economy,” said Steven Wood, chief economist at Insight Economics.

The strength last month was led by a 1.5 percent jump in auto sales. Furniture-store sales rose 1 percent. Hardware stores reported a 1.6 percent increase. But sales at electronics and appliance stores sank nearly 4 percent.

Sales at gasoline stations fell 1.6 percent. That decline reflected mainly lower gas prices. Excluding gas stations, retail sales would have risen 0.3 percent in December.

Restaurants and bars did better over the holidays. Their sales rose 0.7 percent.

The government’s retail sales report is its first look each month at consumer spending, which accounts for roughly 70 percent of economic activity. A healthy report typically signals a stronger economy.

Compared with the similar time last year, retail sales have risen 6.4 percent.

This week, the Federal Reserve issued a report saying the final six weeks of 2011 were among the economy’s best last year. The report pointed to higher holiday and auto sales, along with increased travel.

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