Revealing a small ray of hope in a dismal economy, January retail sales rose 1 percent, the first increase in seven straight months, according to the Commerce Department.

Retail sales in December decreased 3 percent, a downward revision down from the original 2.7 percent decline.

Economists said the increase is likely a correction for dismal numbers during the holiday season and not a recovery in consumer spending.

Peter Gill, communications director for the Illinois Retail Merchants Association, said Chicago’s January retail sales mirror the national numbers. Sales in the area were flat, coming after sluggish holiday sales, he said. January sales are typically slow, and the increase is likely due to gift card recipients coming into stores in January to redeem their cards on purchases, Gill said.

“Most of the increase can be attributed to discounting and marketing,” he said. “The National Retail Federation said most of this year retail sales will be down. If somebody puts an item on sale, consumers are going to go there first.”

The national sales increase included the food and beverage categories, motor vehicles and parts, and gasoline station sales. Sales at clothing stores climbed 1.6 percent and increased 2.6 percent at electronics stores.

The 1 percent increase beat Wall Street economists’ expected drop of 0.8 percent, First Trust Advisors LP economist Brian S. Wesbury said in a research note.

“Today’s report signals the risk aversion hysteria that overcame the U.S. economy in September 2008 is dissipating,” he wrote. “Velocity is stabilizing, possibly rising.”

Although the auto industry has been hit with a devastating blow by current economic conditions, automobile and parts sales rose 1.6 percent last month, according to the Commerce Department.

“The best news was that ‘core’ sales – excluding gas, autos, and business materials – were up 1.2 percent in January,” Wesbury said in his note.

Despite the monthly increase, retail sales were down 9.7 percent from January 2008, as the recession and job losses took their toll.

Consumer spending will likely remain sluggish in the first quarter, but not be as soft as some previous periods, Northern Trust Co. economist Asha G. Bangalore said in a research note. Retail sales weakness the final three months of 2008 will likely be the worst performance in the current economic downturn, he said.

“The headline relief today is welcome but it is unlikely to last,” Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., said in a research note.

In separate reports released in January, many of the nation’s retailers reported sales declines. Macy’s Inc. last week said it will eliminate 7,000 jobs or almost 4 percent of its work force.