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The Faith Consolo Team

Faith Hope Consolo
Licensed Associate Real Estate Broker

575 Madison Ave
New York, NY 10022
Office: 212.418.2000
Mobile: 917.846.2407
Fax: 212.418.2005

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In the News

Back-to-School Shopping Boosts Markets

A late burst of back-to-school shopping fueled surprisingly strong August sales for retailers, easing some fears that a crunch in the housing and credit markets will cripple holiday spending.

Sales at luxury stores including Saks Inc. continued to soar despite recent stumbles in the stock market and teen retailers like Abercrombie & Fitch Co. scored fashion hits with high-school kids. Still more striking were better-than-expected sales at Wal-Mart Stores Inc. and Macy's Inc. — two mega-chains whose businesses have faltered amid this year's economic slowdown.

Still, August's numbers got a boost from a later back-to-school season this year that helped them steal some sales from July, and it's not clear whether the strength will continue. Home prices and sales are bound to decline through the rest of the year, most economists agree, and tighter credit is pinching consumer wallets. A key question, industry watchers say, is when credit markets will recover from the mortgage crisis, and whether the Federal Reserve will cut interest rates later this month. "The middle-market consumer can still afford to shop, but there still are fears stemming from the mortgage market," the chairman of retail leasing and sales at Prudential Douglas Elliman, a New York real estate firm, Faith Hope Consolo, said. "We'll be watching the Fed very closely."

Collectively, retailers reported a 2.9% increase in August same-store sales, or sales at stores open at least a year, according to an index of 47 major chains compiled by the International Council of Shopping Centers. That's ahead of the 2.3% increase logged year to date, but it's well short of the 3.8% gain posted in the year-earlier month, the chief economist at the New York-based trade group, Michael Niemira, said.

A solid job market continues to prop up spending, and robust corporate profits could support that trend through the rest of the year, Mr. Niemira says. Still, he sees more risk to the downside from the housing market. Having watched their homes decline in value this year, consumers in recent months have sharply increased their credit-card debt — a possible precursor to defaults and reduced spending, the chief economist at the Credit Union National Association, Bill Hampel, said.

 

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