Weekend Figures Watched as Holiday Retail Forecast

All eyes will be focused on the retail sector this week--the long post-Thanksgiving Day weekend gives a taste of what holiday shopping will look like. But opinion is divided on the impact of a slower U.S. economy on American consumer spending. “One thing that is going to be important is the [today] and Tuesday view of how good the weekend retail sales were. That can help some or disappoint further,” said Henry Herrmann, chief investment officer at Waddell Reed Asset Management Co. Others say shoppers might leave the bulk of buying until they can get deeper discounts shortly before Christmas. This week also brings November retail sales data for stores open at least a year, with most due Thursday. Auto makers will report November car sales Friday. These will be widely watched because October was a bad month.

Meanwhile, figures on U.S. economic output due Wednesday are expected to show growth cooled more than previously estimated in the third quarter, raising concerns about the depth of the slowdown in the months ahead, analysts said. A “soft landing” for the economy in 2001 is “by no means a sure thing,” according to a forecast by Peter Kretzmer and other economists at Banc of America Securities in New York. Gross domestic product, the total output of goods and services produced in the U.S., probably expanded at a revised 2.3% to 2.6% annual rate in the third quarter, down from the second quarter’s 5.6% growth rate and the weakest performance in four years, analysts said. Previously, the Commerce Department estimated third-quarter GDP grew at a 2.7% pace.