Applied Analysis, a Las Vegas consulting firm, projects retail spending this holiday season will increase 4.8 percent over 2005 — essentially matching the valley's population growth.

That increase is in line with the national outlook, but if those local projections are correct, this will mark the slowest growth in holiday spending since 2001 — the first Christmas after the terrorist attacks in New York City and Washington.

Applied Analysis Principal Brian Gordon said a slowdown in the growth of retail sales this holiday season will mirror what's happening this year in the valley where instead of a double-digit growth rate, sales have been up in the 4 percent to 7 percent range.

Some consumers have been pulling back on their discretionary spending this year because of elevated gas prices and utility payments, analysts said. A slowdown in the appreciation of homes this year has also affected spending because home owners are no longer as able to pull out equity.

Rising interest rates are increasing mortgage payments of those with adjustable rate loans and credit card payments.

"The overall growth of income is still outstripped by the increased cost for low-income to middle-income consumers," said Lee Diercks, a national retail consultant for Clear Thinking Group. "You are not going to see people spending significantly more primarily due because they have less money in their wallet because of the high cost of everyday living. Insurance costs are up, utility rates are up and you have all these issues with medical costs and gasoline."

Clear Thinking is projecting national retail sales will increase 4.5 percent over last year. A year ago, sales grew by 6 percent over 2004, Diercks said.

In Las Vegas, a slowdown in new home construction has prompted additional layoffs by builders, including some in the last two weeks by KB Home and that in turn has led to cutbacks in the construction industry, mortgage, title and other companies as well.

The statewide unemployment rate rose slightly to 4.2 percent in October with officials from the state Department of Employment pointing to the housing slump as part of the cause. The construction industry reported it had 700 fewer jobs in October after months of strong employment gains of about 2,000 jobs a month.

Gordon said he doesn't expect Las Vegas consumers to spend any more this year than they did a year ago.

"What is fueling any expansion of total sales activity is our rate of population growth," Gordon said. "When you take a look at growth it is much slower but it still reflects strong expansion. While it is not as robust, we are not seeing a decline in sales. It is still ahead of last year, but it's just not the level of growth."

The National Retail Federation forecasts that holiday spending will increase 5 percent this year to $457.4 billion. Last week, the association reported retail sales in October, although up 4.3 percent over last year, were not as robust as previous months.

It projects consumers will spend on average about $791, up from $738 last year.

The Consumer Federation of America and Credit Union National Association released a survey Tuesday that showed almost a third of Americans plan on spending less on the holidays this year because they need to use their money for daily expenses. Only 15 percent said they intend to spend more.

Although gas prices have declined, the slow housing market appears to be hurting spending with home improvement and home furnishing stores beginning to struggle, said Rosalind Wells, the National Retail Federation's chief economist. The bright spots are clothing and clothing accessory stores where sales were up 6.7 percent over October 2005. Sporting goods, hobby, book and music stores saw sales 5.7 percent higher in October over the same period a year ago. Health and personal care stores saw sales increase by 9 percent, she said.

Retailers are counting on at least a 5 percent growth in retail sales but various projections put the gains as low as 2.5 percent and as high as 7.5 percent, said Julie Cameron, a vice president of retailer productivity at General Growth Properties, the owner of the Fashion Show mall, the Boulevard mall, Meadows mall and the Grand Canal Shoppes at the Venetian.

Although gas prices have lowered, they are still influencing consumers and their disposable income, Cameron said. The housing market is another factor to watch because of the slowdown in appreciation, she said.

"Customers have had years of being able to leverage their homes to come up with more money to spend on other things," Cameron said. "That party is kind of over with, and it can affect the holiday season."

Politics could also play a role in consumer holiday spending, Cameron said. Some people wonder how the change in power will affect the Iraq war, she said.

Another issue to monitor is price-cutting among retailers after Wal-Mart cut its prices. Home Depot, which has been affected by the housing slump, has started selling electronics, she said.

"It will be interesting to watch how retailers respond," Cameron said of discounting.

Consumer electronics such as digital cameras, cell phones, laptop computers and televisions will be popular items, especially with some retailers like Wal-Mart slashing prices, Diercks said. That means sales must increase significantly to make up for last year's totals, he said.

Pre-Thanksgiving sales are slightly ahead of last year at the Target at Flamingo Road and Maryland Parkway, according to store manager Jonathan Haydock. He said he hopes that's a good sign for holiday shopping but it's too early to judge what the season will be like.

"That can fool you,' Haydock said of judging pre-Thanksgiving sales. "It is too early to judge where we are at."

Sales have been strong at the four Mervyns stores in Las Vegas where shoppers have been buying roasters and other kitchen items to prepare for Thanksgiving, said spokeswoman Leanne Furman.

The National Retail Federation reports that nearly 62 percent of shoppers plan to go to department stores. Discount stores remain the most popular location at 70 percent. Nearly 47 percent of consumers said they plan to shop on-line this year, up from 36 percent three years ago, retailers reported.