Despite flagging confidence and a weak employment picture, the holiday season is off to a good start with excellent retail activity in November and the prospect of a strong December.

After several years of reining in spending, consumers are in the mood to splurge this holiday season. November activity was up substantially over last year. The Retail Index for December was 13.9, up from 12.4 a year ago. Planned spending for December is also strong at 12.7, compared to 11.8 last year.

The Trouble Tracker Index was unchanged from last month at 49.9, but improved slightly from a year ago (52.7). The Consumer Reports Trouble Tracker Index addresses both the proportion of consumers that have faced financial difficulties as well as the number of hurdles they have encountered. These problems have trended downward substantially from August 2009, when the Trouble Tracker Index stood at 68.7. However, the proportion of Americans reporting they have lost or face reduced health care coverage in the past 30 days is up substantially to 9.2 percent from 5.8 percent.

Consumer Sentiment for December (45.4) is also unchanged from November but remains entrenched in negative territory (below 50).

Of course, it wouldn’t be the holidays without stress. This month, as in Decembers past, the Stress Index was slightly to 61.6, up from 58.7 the prior month. The most stressed out are: women (63.7 percent), middle-income consumers (64.2 percent), and those in the West (66 percent).

The Employment Index declined to 49.6 from 50.6 last month, with past 30-day job losses (5.7 percent) outpacing job gains (4.9 percent). This setback reverses three straight months of an improving employment picture. People in the Northeast experienced the most substantial drop in their employment outlook.

Consumer Sentiment remains mired in negative territory at 45.4, unchanged from last month and down significantly from the recent high of April (50.2).

Despite the fact that some indices in the overall index are flat or down slightly, there is cause for optimism. “Though there has been no improvement in Consumer Sentiment or in the financial difficulties faced by consumers, overall measures are fairly stable,” said Ed Farrell, a director of the Consumer Reports National Research Center. “It may be that stability alone in contrast to the gloom of the past several years is cause for celebration.”