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(Adds details, Commerce Dept data)
Jan 13 (Reuters) - An improving economy and attractive deals from retailers powered a better-than-expected 4 percent increase in U.S. holiday sales to $658.3 billion, retail industry group National Retail Federation said.
Online sales were a big contributor to the increase in overall sales, rising 12.6 percent to $122.9 billion versus NRF's estimate of 7-10 percent growth.
The NRF had forecast overall retail sales for November and December, excluding autos, gasoline and dining out, to increase 3.6 percent to $655.8 billion.
"The economy was clearly stronger in the fall and consumers were more active during the holiday season than they had been earlier in the year," NRF Chief Economist Jack Kleinhenz said.
"Economic indicators were up, retailers offered great deals, confidence improved and all of that empowered consumers to spend more," he added.
NRF's data comes after the Commerce Department said on Friday that core retail sales, which exclude gasoline and automobiles, building materials and food services, rose 3.4 percent in December from a year earlier.
Core retail sales correspond most closely with the consumer spending component of gross domestic product.
Analysts have said a jump in consumer spending in the final stretch of December significantly offset a slow start to the U.S. holiday shopping season.
However, several retailers, particularly department store operators such as Macy's Inc and apparel retailers reported weak sales for the period, citing poor traffic in stores. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty)