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The Retail Forward Index of Future Spending for August fell slightly from July as a result of easing of spending plans this month among the Up and Down Markets. Middle Market spending, which accounts for nearly half of consumer spending, is expected to remain stable.

Among Up Market households (incomes greater than $75,000), the Index of Future Spending slipped modestly to 104 in August from 105 in July. Reduced expectations related to near-term stock market performance and moderating home buying weighed on this group. But easier debt loads and a pick up in refinancing activity kept their outlook for spending generally healthy.

For Middle Market households (incomes between $22,500 and $75,000) the Index of Future Spending held steady at about 104. Tempered views about job security and investments were balanced by more favorable assessments of incomes and debt burdens. Plus home buying in the Middle Market logged another strong increase, delivering a boost to their spending outlook.

For Down Market households (incomes less than $22,500) the Index of Future Spending dipped markedly to 104 in August from 113 in July-the highest level of the year. The Down Market is still worrying about job prospects although some of the negative impact is offset by affordable mortgage rates driving home buying and refinancing.

In addition, Retail Forward’s ShopperScape report suggests that the biggest geopolitical influence on consumer behavior seems to rising interest rates – far more than the presidential campaigns, the flat stock market, the threat of terrorism, or the war in Iraq.
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