Consumer Spending to Decrease?

Consumer Spending Expected to Decline(December 7, 2005) -- With the residential real estate market starting to show signs of cooling, consumer spending is also expected to take a hit. Consumer spending has been bolstered in recent years by Americans using their soaring property values to spend beyond their means. Federal Reserve Chairman Alan Greenspan recently calculated that Americans mined $599 billion in equity from their residences in 2004 alone via home-equity loans, home refinancings, and capital gains on property sales. And since so much was spent in recent years on home improvements, retailers such as Home Depot and Lowe's could be affected. However, the stores argue that most Americans will continue to view their dwellings as investments and still will spend in order to protect those investments. Source:

Wall Street Journal (12/07/05); Lahart, Justin