WASHINGTON -- U.S. retail sales fell more than expected in January, pulled down by plummeting auto sales, the government said Thursday, but outside that category, business at retailers posted the fastest gain in more than two years.
"Despite the decline in the auto number, this leaves the first quarter in good shape," said economist Mark Vitner of Wachovia Securities.
"We're likely to see solid consumer spending in the first quarter."
The Commerce Department said retail sales fell 0.9 percent in January after a revised increase of 2.0 percent in December. The January decline was larger than the 0.6 percent drop expected by analysts.
However, retail sales excluding motor vehicles and parts soared 1.3 percent, the largest increase since a matching gain in September 2000 and beating expectations for a 0.5 percent rise.
Auto sales sank 7.5 percent, the largest drop since November 2001.
Auto sales were expected to be weak after manufacturers reported poor sales in January after a slew of incentives boosted sales the previous month.
Analysts said January's seasonally adjusted auto sales rate came in at about 16.2 million units, well off December's 18.3 million rate. General Motors said this month that its January U.S. sales fell 2 percent from a year ago to 293,086 new cars and light trucks.
Boosted by higher prices at the pump, gasoline station sales rose 2.7 percent.