ZURICH, Jan 19 (Reuters) - Swiss retail sales weakened in November, the Federal Statistics Office said on Monday, highlighting the economic downturn's increasing toll on shoppers' morale and overall consumption. Retail sales fell 1.4 percent on the year when adjusted for inflation, though they were still 2.5 percent higher when also adjusted for the number of shopping days, the Federal Statistics Office said on Monday.
Economists surveyed by Reuters had expected an increase of 1.5 percent in real retail sales after a 2.9 percent rise in October.
"The outcome is below expectations, yet comes on the back of a statistical effect given fewer working days in November compared to the same month in the previous year," 4Cast analyst Saara Tuuli said.
"The result nonetheless points to a significant slowing in spending in components such as personal goods, food and clothing and shoes, suggesting the Swiss consumers continue to rein in on discretionary spending," she said.
Consumer spending has supported Swiss growth so far, cushioning some of the drop in exports and investment.
Credit Suisse analyst Fabian Heller said consumption would not collapse but the overall economic slowdown and rising unemployment were taking their toll.
"Consumption will remain a stabilising element, but it is weakening," he said.
Swiss retailers have reported strong Christmas sales and the country's main retail chains Migros and Coop reported record revenue for 2008.
A recent survey showed that retailers expected rising sales this year despite the looming recession.
But SNB board member Thomas Jordan warned last week that consumption was clearly set to weaken.
In the Swiss economic domino -- as Jordan called it -- the slump in exports had forced companies to slash investment spending and lay off staff. Consumers had already turned gloomy, another sign that consumption growth was set to fade.
Swiss car sales dropped in November, with the number of newly registered cars down 16 percent on the year, though registrations rose by 6 percent in December, according to data from auto-suisse, the association of Swiss car importers.
The UBS consumption indicator also dropped to its lowest level in 3-1/2 years in November.
SNB board member Jordan said a recession for the Swiss economy 2009 was unavoidable, repeating the central bank's forecast of a decline in gross domestic product of between 0.5 and 1.0 percent. (Reporting by Sven Egenter; Editing by Andy Bruce)