UPDATE 2-Brazil Dec retail sales drop for 1st time since Aug

(Adds economist comments, annual 2006 data)

SAO PAULO, Feb 15 (Reuters) - Retail sales volumes in Brazil fell in December from November, the first monthly decline after four consecutive months of gains, the government's statistics agency IBGE said on Thursday.

Retail sales BRRSL=ECI fell 0.5 percent in December from November, a steeper decline than the 0.3 percent median forecast in a Reuters survey of 10 analysts. The estimates ranged from a decline of 1.7 percent to a gain of 1 percent.

All four sectors surveyed for the month-on-month data showed a decline, led by a slump of 6.7 percent in sales of furniture and appliances and 3.3 percent drop in the sector encompassing textiles, clothing and shoes.

Brazilians used up most of their yearend bonus payments to buy holiday gifts in November and had to put a break on spending in the final month of 2006, said Fernando Fenolio, an economist at Sao Paulo consultancy Rosenberg & Associados.

The slowdown in December likely won't be long lasting as credit remains healthy, more people are employed and inflation is under control, he said.

"Consumption took place earlier than normal," Fenolio said. "The positive pace (of retail sales) will stay at the beginning of the year. Consumption continues to be robust."

STRONGER ANNUAL DATA

December retail sales volumes rose 5.7 percent when compared with a year earlier, the IBGE said. That was lower than the 6.75 percent median forecast of 14 analysts in the survey. The estimates ranged from 0.2 percent to 8.2 percent.

Retail sales volumes -- instead of total sales receipts via cash or credit card -- exclude inflation that could distort sales comparisons and is used as the benchmark to measure the sector's performance.

Nominal sales, as measured by total sales receipts and unadjusted for inflation, fell 0.3 percent in December versus November and rose 5.5 percent versus December of last year.

For all of 2006, retail sales volumes grew 6.2 percent, boosted by a 7.3 percent rise in the segment encompassing supermarket, food, beverages and tobacco. Nominal sales rose 7.3 percent in 2006.

For a breakdown of retail sales data from the IBGE's Web site please go to: here (Additional reporting by Angela Bittencourt)