Americans armed with more cash to spend due to falling gas prices are expected to pump it back into shopping malls, bolstering projections for the holiday shopping season.

According to the Lundberg survey, the national average for a gallon of unleaded gas was $2.20 the week ended October 21; down 8 cents a gallon from the previous week. Since August, when gas was at its highest price this year, it has fallen 82 cents.

As a result, analysts are bullish that a healthy holiday season will translate into strong demand by tenants for space come 2007. Deloitte Consulting is projecting holiday sales to increase 7 percent this year — a slight drop from last year's growth of 7.8 percent.

“Consumer spending in many sectors is holding up quite well,” says Pat Conroy, vice chairman and national managing principal for Deloitte's consumer business group.

A strong holiday season will keep demand for space high into next year. Richard Moore, research analyst at RBC Capital Markets, doesn't foresee retailers reneging on their leases as consumers tighten their belts because of the slowed housing market. On the contrary, he says, consumer spending is steady from declining prices at the gas pump. “Gas prices and consumer shopping go hand in hand,” explains Moore. “Declining gas prices help more than offset the housing bubble bursting.”