WASHINGTON – U.S. retail sales fell sharply last month as gas prices plummeted and auto sales slowed. But excluding those volatile categories, Americans stepped up their spending a bit.

Retail sales dropped 0.8 per cent in January, the Commerce Department said Thursday, following a 0.9 per cent decline in December. The dollar value of gas station sales plunged 9.3 per cent, the largest drop in six years. Auto dealer sales also fell for the second straight month after big gains in the fall.

Outside those categories, sales ticked up 0.2 per cent after a flat reading in December.

The modest gain suggests Americans are still cautious about spending their windfall from lower gas prices, which economists expect will save the typical family $750 this year. Cheaper gas and strong hiring have sent consumer confidence to seven-year highs, a sign spending should pick up soon.

Some extra spending will likely go toward services, rather than buying more goods at retail stores. The Conference Board survey found that 40 per cent of respondents were more likely to consider a road trip because of cheaper gas. That could lead to more spending on vacations.

Gas prices nationwide fell for 123 straight days to nearly a six-year low of $2.03 a gallon in January, according to AAA. That was the lowest in more than five years. Pump prices have since risen to $2.21 a gallon, but that is still $1.10 cheaper than a year earlier.