Retail sales increased 1.9 percent in December, the sharpest rise in three months, as a rebound in automobile sales helped set a firm foundation for stronger sales growth this year.

Sales for all of 1985 grew 6.3 percent, following a 10.5 percent increase in 1984, the Commerce Department said. The sales strength was concentrated in the automobile sector, where sales increased 5.7 percent in December. The sharp sales gains resulted from U.S. auto makers reinstituting discount-financing plans to lure consumers to auto showrooms.

Retail sales rose 0.7 percent in November, after having dropped 3.9 percent in October when auto makers ended a round of discount financing.

The December retail sales gain supports earlier comments by some department store spokesmen that their sales increased moderately this Christmas season.

The sales report also followed an improvement in the unemployment rate in December. That rate fell to 6.9 percent for civilians, the lowest level since 1980. Economists said that the improvement in employment indicates that the economy will keep growing because more jobs means people have more money to spend.

White House spokesman Larry Speakes said the retail sales report was "exceptionally good news."

"With sales booming and the unemployment rate at its lowest level since 1980, the health of the nation's economy can be readily observed by even the most casual observer," Speakes said.

Commerce Secretary Malcolm Baldrige said that, in light of yesterday's report, he expects "a healthy quarterly gain" in retail sales during the first part of the year.

"It's not fabulous and it's not terrible," said Edward Yardeni, an economist for Prudential Bache Securities. "It's good."

Yardeni said fears expressed late last year by economists that consumers would stop spending have been proven wrong; although many consumers are carrying heavy debt loads, they also have many assets on which to draw to increase purchases.

"There are a lot of Yuppies" who make a lot of purchases with credit, Yardeni said. "As long as jobs are growing, don't count the consumer out."

In a separate report, the Federal Reserve said that consumer credit grew by $4.88 billion in November, equal to an 11 percent annual rate. That follows an $8.13 billion rise, for an 18.6 percent annual rate of increase, in October. The smaller rise in credit in November was attributed to the end of the automobile discount-financing programs early last fall, economists said.

The increase in automobile sales last month accounted for a large chunk of the gain in retail sales in December. Excluding automobile sales, retail sales rose 0.9 percent, for the sixth consecutive monthly increase in such sales.

Sales at general merchandise stores, which includes department stores, increased 0.3 percent in December, following a 1.7 percent increase in November. Some economists said that, instead of spending money in department stores at Christmas, many people bought cars.

Durable-goods sales increased 4.3 percent and nondurable-goods sales rose 0.6 percent last month.