Washington ? Retail sales rose in December at the strongest pace in five months, indicating that the all-important holiday shopping season turned out better than original reports had indicated.

The Commerce Department said Friday that retail sales increased 0.9 percent last month, the strongest showing since a 1.4 percent increase in July.

The increase was better than the 0.7 percent advance that economists had forecast and provided evidence that consumer spending was ending the year on a firmer footing than initially thought.

Initial reports from the nation’s big chain retail stores had set a gloomier tone. They complained that holiday sales had fallen below expectations as mild winter weather depressed sales of winter clothing.

For all of 2006, retail sales rose by 6 percent, a solid showing but down from a 6.9 percent increase in 2005.

That slowdown reflected the fact that consumer spending, after a sizzling start to the year, slowed in the spring and remained at lower levels for the rest of the year as Americans were battered by soaring gasoline prices, rising interest rates and a cooling housing market.

“It appears that households had a merry holiday spending money, despite what the retailers may have been claiming,” said Joel Naroff, chief economist at Naroff Economic Advisors.

He said the strength in consumer spending in the final three months of the year may be enough to push overall growth up to an annual rate of 3 percent or better, significantly higher than the sluggish 2 percent growth rate turned in during the July-September quarter.

And in a good sign for prospects in the new year, a survey showed that consumer confidence shot up sharply in January as consumer worries about soaring energy prices and a slumping housing market appeared to be easing.

The RBC Cash Index showed consumer confidence rising to 95.3 in early January.