Retail sales fell for the sixth consecutive month in December, tumbling by 2.7%, the Commerce Department said Wednesday. It was much steeper than the expected decline of just 1.2%.

Excluding auto sales, sales fell for the fifth month in a row with December sales falling 3.1%, almost twice the 1.5% decline economists predicted. Automobile and parts dealers experienced a 0.7% drop in sales for the month.

Holiday sales did not boost the economy as expected, and revised figures from November showed that sales decreased by 2.1%, instead of the 1.8% as originally reported. October sales figures were also revised to reflect a drop of 3.4% from a previously reported figure of 2.9%.

“Consumer spending is clearly in recession feeling the effects of job losses, falling home values and ongoing stock market uncertainty,” said Fox Business Senior Economist Mark Lieberman.

The fallout from the weak retail report could potentially lead to more bankruptcy filings by retailers, Lieberman said. This could potentially lead to more layoffs, the shuttering of shopping centers, and weak fees for credit card issuers exacerbated by credit card delinquencies, he said.

Retail sales for 2008 as a whole reflected a 0.1% drop, marking the first annual decline on record since this series began in 1992.

“In addition to further undermining the financial sector, this retail sales report also means more than anticipated weakness in consumer spending, the major component of Gross Domestic Product,” Lieberman said.

This month’s decline in retail sales was broad-based with only one retail category – health and personal care – showing a month-month improvement in sales, according to Lieberman.

Gasoline station sales, which account for about 9% of all retail spending, fell by 15.9% for December, up slightly from an 18.3% decline in November. Import prices in December fell by 4.2%.