LOS ANGELES – In another sign of a firming economy, the U.S. auto industry is having a good holiday season.

Retail sales of new vehicles this month are “significantly beating expectations,” according to automotive information company J.D. Power & Associates. The firm tracks transaction data from more than 8,900 car dealers nationally.

Through the first two weeks of December, retail sales were tracking at annual pace of 10.8 million units, the best of the year and a huge jump from the 8.5-million-unit pace during the first quarter of this year.

Improvement in the auto market follows other recent positive economic signs, including a drop in claims for unemployment benefits that has sent the four-week average to its lowest level since August 2008.

Fleet and commercial auto sales are off a bit from earlier this year, but J.D. Power noted that retail transactions are the most accurate measurement of “true underlying consumer demand for new vehicles.”

“Even with the possibility that sales in the third week of December may be affected by the recent winter storms, the strength in sales during the second week is expected to continue through the rest of the month,” said Jeff Schuster, executive director of global forecasting at J.D. Power. “As a result, it appears that 2010 will end on a high note.”

The improved auto industry outlook prompted J.D. Power to increase its forecast for total light-vehicle sales this year to 11.6 million units, up 100,000 from its previous estimate and an increase of almost 11.5 percent from the 10.4 million vehicles sold in 2009.