U.S. retail sales fell unexpectedly in December, leaving 2009 with the biggest yearly decline on record, and businesses increased their inventories by a bigger-than-expected amount in November, the government reported Thursday. The Commerce Department said retail sales fell 0.3 percent last month, the first drop in three months, as consumers spent less on vehicles and several other categories of goods during the holiday shopping month. Economists had expected retail sales to rise 0.5 percent in December. Retail sales were up 5.4 percent from December 2008, but for the year, sales fell 6.2 percent, the largest decline on government records dating back to 1992. The only other year that annual sales dropped was in 2008, when they fell 0.5 percent. The Commerce Department said in a second report that business inventories rose by 0.4 percent in November, marking the second consecutive month that business stockpiles have increased after a period of 13 monthly declines in inventories. The hope is that future sales gains will convince businesses to continue restocking, a development that will increase manufacturing and provide support for the recovery. Meanwhile, a Labor Department report showed that import prices were unchanged in December, reflecting tame inflation.
