U.S. consumer sentiment slipped in November, data showed on Wednesday, sparking concern over the outlook for the country's retail sector during the holiday gift-giving season, according to Reuters. The University of Michigan's final reading of its November index of consumer sentiment fell to 92.1 from October's final reading of 93.6. Economists polled by Reuters had expected a final November reading of 93.1. "Though these figures did little to change the overall outlook, they took the luster off the outlook as we enter the Thanksgiving Day holiday, and the start of the U.S. holiday shopping season on Friday," said Michael Englund, chief economist at Action Economics in Boulder, Colorado. Many Americans do not plan to spend lavishly during the holidays, despite a a healthy job market and income gains this year as higher energy costs and tight finances still leave many families feeling stretched, surveys have found. According to a survey by the Consumer Federation of America and the Credit Union National Association, 32 percent of shoppers want to spend less than they did during the 2005 holidays. About half of the survey's roughly 1,000 respondents said they would like to spend about the same and only 15 percent intended to spend more. The National Retail Federation expects U.S. shoppers to spend just 5 percent more this holiday season, down from 6.1 percent growth a last year. Credit card group Visa USA estimates growth will be around 7.5 percent. For many retailers, how the year-end shopping season pans out means the difference between a good year and a bad year. It also affects the overall U.S. economy, which is largely driven by consumption. The dollar extended losses after the weaker-than-expected reading on sentiment, while U.S. Treasury debt prices were mostly steady in thin trade ahead of the Thanksgiving Day holiday on Thursday. Stock markets also were little changed. JOBLESS CLAIMS RISE Meanwhile, the Labor Department said the number of U.S. workers applying for jobless benefits rose by an unexpectedly steep 12,000 in the week ending Nov. 18. Overall, jobless claims rose to 321,000 in the week, which compares with Wall Street forecasts for claims of 310,000. This follows a revised 309,000 the previous week. "So far, jobless claims remain extraordinarily low despite a rapidly deteriorating housing market and a weakening manufacturing sector," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania. The labor market is under close scrutiny after a surprise drop in the unemployment rate to 4.4 percent in October, from 4.6 percent, after 92,000 fresh jobs were created that month. Federal Reserve officials may worry a tight labor market could add to wage pressures as they consider whether to keep interest rates on hold at their next meeting, on Dec. 12. In other data released on Wednesday, U.S. mortgage applications fell for the first time in three weeks despite a dip in mortgage rates to their lowest level since January. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended Nov. 17 fell 3.7 percent to 623.6 from the previous week's 647.5. A cooling housing market has raised fears the U.S. economy may be heading for trouble, with some investors betting the Fed will have to cut rates next year as growth slows.
