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Consumers Look Weak for Fall

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Falling gasoline prices are certainly good news for consumers, the main reason economists expect the University of Michigan to report a slight improvement in its consumer-sentiment index, also due Friday. But gas prices are still 30% higher than a year ago, and consumer sentiment is still near its lowest level since 1982.

Meantime, the effects of income-tax rebate checks are fading. Credit is tightening. The unemployment rate has jumped to its highest level since 2003. In short, consumer spending is due for a sharp slowdown.

Investors in retail stocks are hearing none of it. The Dow Jones Wilshire U.S. Retail index has gained 15% since mid-July to nearly its highest level of the year, trouncing the broader market. Shares in retailers, from discounters such as Wal-Mart Stores to fancy department stores such as Macy's, have gone along for the ride. They could be in for a fall, too.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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