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Refinancing money may account for 2002 sales boost, says expert

In the post-Sept. 11 days of Christmas 2001, a late rush to cash registers made for a reasonably good season for retailers.

In 2002, all that cash from home refinances is driving the market, says New York analyst Michael Baker, director of research for the International Council of Shopping Centers.

This season is turning out to be very similar to what we saw last season, Baker says. There's a soft economy, no employment growth and there are geopolitical concerns. The only thing different is that there is a tremendous amount of refinancing cash that's being made available to consumers.

He says retailers needed the strong post-Thanksgiving burst to compensate for a shortened shopping season.

With the shopping season starting six days closer to Christmas than last year, it really didn't come as a surprise, Baker says. But there's no reason to change the outlook for a modest gain.

Baker says it will take business investment and the creation of new jobs to produce shopping cash next year.

At this point, the consumer is carrying the economy, he says. Business investment needs to come back. There are a million fewer people at work than a year ago. If those people get jobs next year, then you can look forward to increased spending.

Even if there wasn't the spending per capita, just the sheer amount of people back on payroll would make a difference.