U.S. retail sales slump 2.7 pct in December

WASHINGTON (Reuters) - Sales at U.S. retailers fell at a steeper-than-expected rate in December, government data showed on Wednesday, as a deteriorating economic environment forced consumers to cut back on spending during the key holiday period.

The Commerce Department said total retail sales fell 2.7 percent to a seasonally adjusted $343.2 billion (236.2 billion pounds) last month following a revised 2.1 percent drop in November, previously reported as a 1.8 percent decline.

December's drop was the biggest since October last year when sales fell 3.4 percent. For the whole of 2008, sales eased 0.1 percent, the department said.

Excluding motor vehicles and parts, sales were down a record 3.1 percent after a revised 2.5 percent decline in November, previously reported as a 1.6 percent drop, the department said. Total sales, excluding autos, rose 3.0 percent in 2008.

Analysts polled by Reuters had forecast December retail sales falling 1.2 percent. Excluding motor vehicles, sales had been predicted to drop 1.3 percent.

Gasoline sales tumbled 15.9 percent after diving by a record 18.3 percent in November.

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)