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When stimulus comes to an end

Shoppers carry packages in Chicago.

TEXT OF STORY

Renita Jablonski: The last big mailing of economic stimulus checks is scheduled for today. Much of the economic boost from consumers spending the checks is expected to fade by August. Retailers have to be asking themselves, then what? Luckily, Marketplace's Nancy Marshall Genzer happens to have a crystal ball. And, wait, I . . . I think I see a guy with a red suit and a white beard.


Nancy Marshall Genzer: In retail, it's never too early to think about Christmas. Santa won't like it, but retailers will be doing a lot of crying and pouting this year. The rebate checks will run out just as stores ramp up for the holidays. Gas prices will probably still be high -- and housing prices low. As a result, wary retailers are making suppliers agree to take back unsold merchandise.

Gary Rosenberger is with EconoPlay:

Gary Rosenberger: Nobody wants to hold the hot potato, because someone's going to lose.

The economy is expected to be weak into the first quarter of next year. Hugh Johnson of Johnson Illington Advisors says retailers can only hope for a quick economic rebound.

Hugh Johnson: Those rebate checks go away, its going to be very, very tough. But something unexpected could come along and improve the outlook dramatically.

Johnson says a drop in gas prices could send consumers back to retailers in time for the holidays.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.
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I think this is putting things into almost a rosy picture. We should all be preparing for an accelerated downturn in the economy after holidy profits fail to materialize and retailers and suppliers start some deep cuts. That's the downside to a 'supply-side' economy. If no one's buying, no one's working.

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