NEW YORK (CNN/Money) - Retail sales fell in January, a government report showed Tuesday, largely due to a drop-off in automotive sales from their sharp gain in the previous month.

The Department of Commerce report showed overall sales fell 0.3 percent in January, the first overall decline since last August, compared with a revised 1.1 percent gain in December.

Economists surveyed by Briefing.com had forecast retail sales to have declined 0.5 percent for the month.

Excluding auto sales, retail sales rose 0.6 percent, following a revised 0.3 percent gain in the prior month. Economists, on average, had expected a rise of 0.4 percent for the period.

Much of the last month's shortfall was seen in the sales of motor vehicles, which fell 3.3 percent versus a 4 percent rise in December, as carmakers pared back on the juicy incentives offered to consumers over the holidays. Building and garden equipment sales dipped 0.3 percent.

Apparel sales, however, posted a strong performance, up 1.8 percent last month. Department store sales also rose 0.3 percent, while sales of health and personal care products rose 0.6 percent.

"One of the key takeaways from today's report is the consistency of the underlying pace of consumer demand, which is holding up reasonably well if you ignore the auto component," said Michael Niemira, chief economist and director of research with the International Council of Shopping Centers (ISCS).

"I think that we've already gone through the high-growth phase of the business cycle and now we're going into a sustainable pace of economic growth," he added. "That to me is the story of 2005. We're already seeing it consumer demand with the core retail sales data."

Robert Brusca, economist with FAO Economics, agreed.

"The tale of the zombie consumer continues," Brusca wrote in a note Tuesday."There is no stopping him or her: Can't shoot 'em, stab 'em, or keep 'em away from the stores with garlic -- especially with post-season sales in progress."

At the same time, Niemira cautioned that the volatility in auto sales may suggest an area of potential softness this year, especially if production slows down.

Shoppers may have entered the New Year in a buying mood but it remains to be seen if that sentiment hold up going forward.

For instance, early last year merchants were still seeing the lingering positive impact on sales from the tax rebate checks of 2003. That spending incentive has pretty much dried up.

And the employment picture, though improving, is still a little foggy. Any major setbacks on the jobs growth front could quickly put consumers on the back foot.

"The economy is generally chugging along," said Delos Smith, economist with the Conference Board. "From the consumers' perspective, jobs remain an important issue. Consumers will also be keeping an eye on gas prices and what happening on the global front in terms of terrorism."