Retail Sales on Display in Coming Week

NEW YORK (TheStreet) -- The consumer will be in focus next week, as the government will release its read on November retail sales, providing another glimpse of the strength of holiday shopping.

Investors parsing the state of the economic recovery received a pleasant surprise Friday when the Labor Department reported that the rate of U.S. job loss slowed much more sharply than expected in November. The government's report on nonfarm payrolls for November showed a loss of 11,000 jobs, vs. the consensus expectation of a decline of 125,000, and nation's jobless rate also edged down to 10% from a 26-year high of 10.2% in October.

Another key facet of the recovery, however, is consumer spending. The retail sales report will be the most closely watched of several important clues about whether consumers are confident enough to open their wallets wider.

>>Bull or Bear? Vote in Our Poll

The Commerce Department will issue the retail sales report Friday. The last several days of November included Black Friday, which marks the unofficial start of the holiday shopping season, and Cyber Monday. Economists polled by Thomson Reuters expect an increase of 0.7% in November vs. a 1.4% increase in October, which had been boosted by automobile buyers re-entering the market after taking a break after the summer's Cash for Clunkers stimulus program. Excluding auto sales, economists expect a 0.4% increase in retail sales, vs. a 0.2% increase in October.

Also on Friday, the University of Michigan will report its Consumer Sentiment Index for December. Economists expect a 68.5 reading, which would mark an increase from 67.4 in November, but last week's upside surprise in the nonfarm payrolls report could boost the expected number.