Retail sales grew at their slowest pace in five months in November, tempering expectations for a strong holiday shopping season.

Retail sales increased a weaker-than-expected 0.2 percent after gaining 0.6 percent in October, a Commerce Department report showed on Tuesday.

Relatively strong consumer spending in recent months has helped the United States resist a global slowdown fed by Europe's still menacing debt crisis.

A separate report showed U.S. business inventories rose in October by the most in five months, pointing to stronger growth as companies restock shelves to meet consumer demand.

Indeed, November's cooler retail data looked unlikely to rekindle fears of an imminent recession, and Federal Reserve policymakers meeting on Tuesday did not unveil any major policy shifts. The Fed did, however, say financial market turbulence posed a threat to economic growth.

Some economists warned that some of the strength in American consumption has come from households saving less, a trend that might not last. Indeed, Tuesday's retail data suggested some of that strength might already be waning.

November's modest rise could ... be the start of a period in which households start to spend more within their means, said Paul Dales, an economist with Capital Economics in London.

Receipts for motor vehicles and parts fueled the overall increase, rising 0.5 percent. Excluding autos, sales rose just 0.2 percent.

One factor weighing on consumers, analysts said, was a substantial drop in household wealth so far this year. Big drops in the stock market during the third quarter led household wealth to contract $2.4 trillion, Fed data showed last week.

Another constraint on spending has been weak growth in after-tax incomes, which have failed to keep up with inflation.

In November, sales at food and beverage stores fell 0.2 percent, while receipts at gasoline stations dropped 0.1 percent.

HEAVY DISCOUNTING

Still, shoppers swarmed into stores over the Thanksgiving weekend, traditionally retail's biggest sales period. Reports of a strong weekend performance had fueled optimism about the outlook for holiday spending.

Some of the weakness in the November retail sales might be because stores discounted heavily to attract customers, said Millan Mulraine, a macro strategist at TD Securities in New York.

It's fairly disappointing given that all the evidence was pointing to fairly strong gains during the month, said Mulraine.

One retailer that felt the pinch from heavy discounts was Best Buy Co , the world's largest electronics chain. The firm on Tuesday reported a fall in third-quarter profits. Its shares dropped more than 10 percent.

Despite Best Buy's results, U.S. stock indexes rose and government debt prices fell. The dollar strengthened on concerns about a lack of unity among European nations to tackle their debt crisis.

Some details within the report were more heartening. Sales outside autos, gasoline and building materials - which correspond most closely with the consumer spending component of the government's gross domestic product report - rose 0.3 percent in November.

That led Goldman Sachs to raise its forecast for the pace of fourth-quarter U.S. economic growth by a tenth of a percentage point to 3.5 percent.

Also positive for the growth outlook, a survey showed small U.S. businesses grew more confident in the economy's future in November, a third straight month of improvement.

(Reporting by Jason Lange; Editing by Neil Stempleman and James Dalgleish)

Retail