tx#The upcoming holiday shopping season is shaping up as good but not great in the view of most economists.

A strong season is important to both merchants and the banks who finance them. Last Christmas disappointed many retailers, who faced slim profit margins amid stiff competition.

This year, "fundamentals seem to support a good selling season," according to Sung Won Sohn, chief economist at Norwest Corp., Minneapolis. "Jobs are plentiful, income gains are healthy, and consumer confidence is high."

"Although not a barn-burner," he said of the sales outlook, "we believe this Christmas season should be a decent one for retailers."

But Mr. Sohn and other economists have been perplexed by an anomaly. Strong job and income figures and high confidence during the summer and autumn have not sent shoppers scurrying to the mall.

High consumer debt levels may be playing a role, although interest rates have been stable and credit card delinquencies have eased.

Gary L. Ciminero of Independent Economic Advisory, Providence, R.I., was the least sanguine. He forecast a "stingy Christmas" because of consumer debt.

Most economists are nearer the forecast of Stuart G. Hoffman, chief economist at PNC Bank Corp., Pittsburgh.

"I look for a good season - not a spectacular one," he said, "but certainly good in contrast to the weak 1995 season for retailers. Profit margins should hold up a little better than last year."

Still, the softness in retail sales leading up to the crucial fourth quarter has raised questions.

"This is a real puzzle," said Ian C. Shepardson, chief U.S. economist at HSBC Markets, New York. "It looks like the third quarter will have had very close to zero growth in consumer spending."

"The question everyone asks is whether this is the start of a longer- term slowdown in spending, perhaps a mini-recession for the consumer," he said, or whether "it is a short-lived blip."

"My guess is that real incomes and employment are rising too strongly for a recession in the consumer sector," Mr. Shepardson said, "so we should see some rebound in the fourth quarter for a reasonable Christmas but not much more than that."

A strong rebound is unlikely, Mr. Shepardson said, because of fears that rates may rise. "Given the heavy debt on their balance sheets, consumers are (more) sensitive to even the prospect of changes in short-term rates than they used to be.

"That's why a federal funds rate of 5.25% today generates only modest growth, while the same rate 10 years ago would have us in a raging boom," he said.

Indeed, lower rates are less effective, he said, because "consumers have got so much debt that only a small change in rates by historic standards produces a big change in their debt servicing costs, and they don't like that."

And fourth-quarter consumer spending won't offer much guidance about the 1997 economy, he said. "It will leave Wall Street confused in the first quarter next year about where rates are going."

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