UPDATE 1-German retail sales unexpectedly fall in December

* Retail sales -1.4 pct m/m, -0.9 pct y/y
* Economists say will likely be revised up

(Adds details, quotes, background)
By Sarah Marsh
BERLIN, Jan 31 (Reuters) - German retail sales fell
unexpectedly in December, suggesting Europe's debt crisis
unsettled consumers during key Christmas trade, although
economists said they expected the preliminary data to be revised
upwards.
The notoriously volatile indicator fell 1.4 percent in real
terms on the month, and 0.9 percent on an annual basis, data
from the Federal Statistics Office showed. The indicator missed
forecasts in a Reuters poll of economists for gains of 0.9 and
1.4 percent respectively.
"These numbers suggest Christmas business was disappointing
for retailers," said Commerzbank's Ulrike Rondorf. "But the
statistics office data are often revised."
"Retailers themselves were relatively optimistic, and
private consumption remains, in our view, a supporting pillar of
the economy."
Germany's HDE retail association has said retailers saw a
strong finish to the Christmas season with turnover for the
period expected to be 1.5 percent above year-ago levels
DIY stores operator Praktiker announced a surprise return to
sales growth for its namesake German stores in November and
December, while fashion house Gerry Weber said revenue in
Germany jumped 28 percent in December.
Berenberg Bank economist Holger Schmieding said the December
figures were "almost too bad to believe."
"Anecdotal reports and consumer confidence simply do not
confirm the news from these data," he said, suggesting the
Statistics Office may revise the figures upwards.
"Typically, at year end, retail sales get underreported a
lot and usually revised up significantly," he said.
Germany's export-driven economy recovered quickly from the
2008/09 financial crisis, but the outlook has darkened as euro
zone debt worries have begun to weigh on the real economy.
Many economists expect at least one quarter of contraction in
Germany as global demand falls and the region's debt crisis
affects its key neighbouring export markets.
Consumer surveys however show that German consumers remain
upbeat, suggesting private spending will weather bad news from
the euro zone thanks to the solid domestic job market
Consumer morale rose unexpectedly to a 10-month high going
into February, a survey showed last week.
"As long as the labour market is doing well, consumption
will be strong," Commerzbank's Rondorf said.
German unemployment data is due later on Tuesday.
The Statistics Office revised downwards November retail
sales to a fall of 1.0 percent on the month, from a previously
reported decrease of 0.9 percent.
On an annual basis, it also revised sales downwards to a
gain of 0.9 percent from 1.4 percent.

(Reporting by Sarah Marsh, Additional reporting by Gareth Jones
and Reinhard Becker)