With consumers and economists lowering their expectations for U.S. growth in 2005, strong backward-looking data were harder to appreciate Tuesday.

Although gross domestic product in the third quarter was revised up to 3.9% from 3.7%, consumer confidence fell to a nine-month low in November amid concerns that the economy will not gain momentum in early 2005.

Meanwhile, the Organization for Economic Cooperation and Development reduced its U.S. growth projections for next year to 3.3% from 3.7%, citing the rapid jump in oil prices.

"Business confidence has fallen back to just above the historical trend in the United States and Europe, dashing hopes that GDP would keep growing above trend over the next few months," the Paris-based think tank said in a report.

"Compared to cautiously upbeat assessments that could be made even two months ago, this turnaround has been a source of disappointment ... prompted in large part by a surge in oil prices that has depressed real incomes as well as confidence in the OECD countries."

In the third quarter, economic growth was fueled by a 5.1% increase in consumer spending, as automakers aggressively stepped up incentives. But consumer confidence faltered in November, with the Conference Board's index slipping to 90.5 from a revised 92.9 in October. While a drop in confidence doesn't always lead to a decline in spending, it isn't a positive sign.

Analysts had expected the index to rise to 96, as stock prices and the job market appeared to be improving.

Lynn Franco, director of the Conference Board's Consumer Research Center, said consumers' assessment of current conditions is holding steady and intentions to spend for the holiday season are up from last year.

"The outlook for retailers is mildly encouraging," she said. "But looking beyond the upcoming holidays, the continuing erosion in expectations suggests consumers do not feel the economy is likely to gain major momentum in early 2005."

Consumers expecting conditions to worsen in the next six months rose to 11.9% from 10.5% and consumers expecting fewer jobs to become available in the next six months rose to 19.7% from 18.3%.

After a strong Black Friday, analysts said the holiday shopping season could be better than expected. Retail sales rose 10.8% on the day after Thanksgiving, according to ShopperTrak RCT, which measures store traffic from 30,000 outlets.

Still, activity over the full weekend was more disappointing. Retail sales rose just 2.9% during the first major shopping weekend of the season.

"After Friday's robust performance, these numbers are slightly weaker than industry analysts would have expected," said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers.

A reduced forecast from retail giant

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also has raised questions about consumer spending over holiday period.

On Tuesday, the International Council of Shopping Centers cuts its November retail sales estimate to between 2.5% and 3% from between 3% and 4% for November, on a year-over-year basis.

In the week ended Nov. 27, retail sales fell 1.5%, according to ICSC and UBS. Another survey by Redbook found that chain-store sales were down 0.5% in the latest week compared with October. Data on personal income and spending for October will be released Wednesday.

A separate report Tuesday showed that business activity in the Chicago area cooled down in November, although it remained at a high level.

The Chicago purchasing managers index fell to 65.2 this month from a 17-year high of 68.5 in October. Economists were expecting a reading of just 62. While production and orders declined, inventories and employment advanced. The jobs component added 6.7 points to 60.8, the highest reading since August 1988.

Although the economy has picked up speed after hitting a "soft patch" in June and July, growth has not been able to match up to levels seen in the four quarters ended March 31.

The economy grew at a rate of 3.3% in the second quarter after climbing 4.5% in the first. Corporate profits also have slowed down this year, according to the latest GDP report. Overall, profits fell $27.6 billion in the third quarter, as the series of hurricanes in the Southeast hurt production. Profits increased $8.3 billion in the second quarter.