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U.S. consumer confidence slipped at the end of November, suggesting retailers could face a challenging holiday season.

The University of Michigan final consumer sentiment index for November fell to 91.3 from a midmonth reading of 93.1. The final October reading stood at 90.0. Economists surveyed by The Wall Street Journal had predicted the final November index would edge down slightly to 93.0.

Consumer sentiment is still near the past six months' average of 91.6, but Americans' spending habits haven't matched their rosy outlook. After more than a year of low gas prices and steady job creation, many areas of the retail market remain lackluster.

Wages have been slow to rise, and prices of necessities like medical care and shelter are climbing, eating up larger shares of workers' paychecks. Consumer sentiment is also sensitive to market gyrations: a tumbling stock market pushed the index to a 2015 low of 87.2 in September after reaching 96.1 in June.

"The data indicate that consumers have become increasingly aware of economic cross currents in the domestic as well as the global economy," said Richard Curtin, the survey's chief economist.

Still, the reading of 91.3 was 2.8% higher than November a year ago.

Another gauge of consumer sentiment compiled by The Conference Board plunged to its lowest level in more than a year, the private research group said Tuesday.

Consumer spending accounts for roughly two-thirds of overall economic output in the U.S. Retailers hoping that continued low gasoline prices and a robust job market will unleash spending have so far been disappointed.

A report from the Commerce Department released Wednesday showed that U.S. consumers ratcheted up savings rather than spending in October. The personal saving rate climbed to 5.6% in October, the highest level since December 2012.

Another report released Tuesday by the Commerce Department showed that overall consumer spending increased at a 3% rate in the third quarter, down from the second quarter's 3.6% pace. The recent gain was led by strong spending on long-lasting goods, like automobiles.

U.S. retail sales barely edged up in October after stalling for two months, the Commerce Department reported earlier this month. Consumer spending at retailers climbed just 1.7% since October 2014, compared with a 4.7% annual increase the year before, even though Americans have enjoyed cheap gasoline for more than a year.

Wal-Mart Stores Inc.'s sales edged up slightly in the third quarter, but over half of its sales are groceries. Home Depot Inc. also had a strong third quarter, but retailers like Macy's Inc., Nordstrom Inc., and Dick's Sporting Goods reported weak third-quarter results.

The National Retail Federation predicts holiday sales will rise 3.7%, only slightly less than last year's 4.1% gain.

Write to Anna Louie Sussman at anna.sussman@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 25, 2015 10:55 ET (15:55 GMT)

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