By Sinéad Carew

(Reuters) - With expectations for slowing growth escalating, U.S. fund managers are selectively avoiding stocks in consumer companies as lofty valuations, concerns about declining earnings estimates, and consumer confidence keep them on guard.

Low U.S. unemployment and rising wages should point to a healthy consumer, but worries about global growth, domestic U.S. politics and a U.S.-China trade war have been wearing on consumer and investor moods.

Wall Street expects fourth-quarter earnings growth of 14.7 percent for the S&P 500's consumer discretionary index - below the 17.8 percent consensus from October at the beginning of the fourth quarter, according to data from Refinitiv as of Friday morning.

And for the first quarter, analysts expect discretionary earnings to fall 1.7 percent, compared with expectations for 6 percent growth on Oct. 1.

For consumer staples, fourth-quarter earnings are expected to grow 4.2 percent, down from the 6.7 percent consensus in October, with 0.7 percent growth expected for the first quarter.

In comparison, the broader S&P benchmark is expected to report fourth-quarter earnings growth of 16.8 percent and decline 0.1 percent in the first quarter.

"Our thoughts on the global consumer is that the marginal data points coming in are more negative than positive," said Eric Freedman, Chief Investment Officer at U.S. Bank Wealth Management in Minneapolis. His firm is "market weight to slightly underweight" on consumer discretionary while it views consumer staples valuations as "fair to slightly over valued."

U.S consumer confidence fell to a 1-1/2 year-low in January as a partial shutdown of the government and financial markets turmoil left households nervous, according to a Conference Board survey.

Shawn Kravetz, Esplanade Capital LLC's chief investment officer, said while the "consumer remains generally robust, most people have had something in their life in the past few months that has given them pause."

"For the wealthy it was watching the stock market go down 15 percent in the fourth quarter," Kravetz said. "For government workers, it was weeks of no cash flow and uncertainty. For many it was the uncertainty of the shutdown and what the secondary effects might be to them directly, to their jobs or businesses, or the economy at large ... everyone was touched directly or indirectly. That didn't pop the bubble but certainly let a little air out."

Like other investors, Kravetz is largely avoiding consumer stocks because of their valuations.

The consumer discretionary index trades at roughly 19.8 times forward earnings estimates compared with 17.3 for consumer staples and a 15.8 multiple for the broader S&P, according to Refinitiv data.