NEW YORK (CNN/Money) - U.S. retailers had relatively flat holiday sales, according to a government report Tuesday, although consumers continued to splurge on cars backed by zero-percent financing incentives from auto makers.

A Commerce Department report shows December retail sales rose 1.2 percent from November levels, which was below the 1.5 percent increase predicted by analysts surveyed by Briefing.com. But that gain came from strong auto sales in the period, boosted by incentives from auto makers. Retail sales excluding autos were unchanged in the month, weaker than the 0.3 percent increase forecast by Briefing.com.

Kathleen Hays breaks down the retail sale numbers by sector and takes a look at the debate over consumers' choices. Play video (QuickTime, Real or Windows Media)

Auto sales were up 5.5 percent in the month, but just about all other retail segments saw well less than 1 percent gains, and some sectors, such as sporting goods, hobbies, books and music, saw sales fall from November levels. Segments that normally see strong gains in the holiday shopping period, such as electronics and appliances, saw a 0.6 percent rise, while clothing and accessories saw a 0.8 percent gain.

Also, furniture and home furnishing stores sales were flat after posting a sizable 1.6 percent rise in November.

Economists were somewhat conflicted about the morning's numbers.

"We had a positive headline number with November's upward revision, but we're still seeing a discouraging trend," said Lara Rhame, economist with Brown Brothers Harriman. "Excluding auto sales, sales have gone from 0.8 to 0.3 to flat over October, November and December. So we're seeing growth mainly based on auto purchases. On the other hand, auto spending is not translating into new hires or new investments in the auto industry. And that's true across industries."

Added Rhame, "What this means is that business leaders are not convinced that strong sales numbers will be maintained on or at the same level."

The report is not a surprise after a number of major retail chains, including industry leader Wal-Mart Stores Inc. (WMT: Research, Estimates) and No. 3 Target Corp. (TGT: Research, Estimates), reported weaker holiday sales than they had anticipated going into the period.

Richard Rippe, chief economist with Prudential Financial was a little more optimistic. "Even if the auto sales taper off, we'll go back to consumer fundamentals where consumer spending will be supported by rising incomes helped by additional fiscal stimulus," said Rippe. "Even though employment fell in December, it's been flat over the last six months. Consumer spending will also find moderate support from the housing sector as the mortgage refinancing activity continues."