US retailers fear weak Christmas

US retailers are far from confident about Christmas trading

US consumer spending picked up in October, but Wal-Mart, the nation's largest retailer, is now cautious about the key festive trading period.

Consumer spending rose by 0.2% last month, the best showing in three months, said the Commerce Department.

The rise followed a 0.2% decline in September and a 0.1% rise in August.

But Wal-Mart said it expected December's like-for-like sales to rise by a mere 1% after they actually fell 0.1% in November.

US consumer spending is closely monitored because it accounts for two-thirds of the country's total economic activity.

Slowdown concern

October's spending increase was helped by a 0.4% rise in household incomes.

The figures will give the interest rate-setting Federal Reserve much to consider.

Despite a wealth of sometimes seemingly contradictory data, a majority of analysts agree that the Fed will most likely cut interest rates early next year in an effort to boost the economy.

US rates have been on hold at 5.25% since August, following 18 successive quarter-point rises to combat inflation.