November and December combined brought holiday sales growth to 5.7%, the strongest growth since 1999 and higher than the previous year's 5.1% increase, according to a report released today by the National Retail Federation (NRF). The retail trade association had been predicting a 4.5% GAFS (which includes book and music stores ) sales increase since September.

December retail sales in the GAFS category rose 6.4% over the previous year and increased 0.5% seasonally adjusted from November, according to the NRF.

"Even after all of the hand-wringing by retail analysts, the holiday season ended on strong footing," said Rosalind Wells, NRF chief economist. "Post-holiday discounting and gift-card redemptions helped provide a last-minute surge in spending."

December retail sales released today by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) rose 1.2% seasonally adjusted from November and increased 9.3% unadjusted year-over-year.

"Though we were projecting a solid holiday season, the final outcome was better than we thought it would be," said Tracy Mullin, NRF president and CEO. "The 2004 holiday season should serve as a reminder that retail analysts should never underestimate the power of the consumer."

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