The Commerce Department reported Friday that consumer spending edged up just 0.2% in October, weakest showing since a similar increase in June. And individual incomes grew just 0.2%, poorest showing in six months.

A separate Commerce report showed that construction spending fell 0.8% last month, biggest decline since July. Activity in the besieged housing industry fell for a 20th straight month while non-residential construction also weakened.

The figures on consumer spending and construction raised new worries about spreading economic weakness caused by the steepest slump in housing in more than 20 years and a widening credit crisis triggered by rising mortgage defaults. Consumers are also being battered by surging prices for gasoline and other energy.

You can see the story here and the Commerce Department release here.

While it’s generally accepted that residential real estate experienced a massive bubble, few have argued that commercial real estate’s seven-year bull run had lost touch with reality. But now a London analyst–based on looking at commercial real estate derivatives is saying just that.

“Commercial real estate is a full-blown bubble that feels very much at a bursting point,” said Christian Stracke, an analyst in London at CreditSights Inc., a fixed-income research firm. “There’s a fairly toxic mix of factors at work.”

There’s been a lot of stories about various commercial real estate indices of late. S&P updated its indices through August this week, which showed values still rising. The Moody’s/MIT index, meanwhile, showed a decline. And deal volume has dropped off significantly.

(Spotted at Mish’s Global Economic Trend Analysis.)

Fortune has a an in-depth look at Eddie Lampert’s record at Sears so far.

It wasn’t long ago that investors bid shares of Sears to dizzying heights in the belief that Lampert, who is also chairman, would magically unlock value in the beleaguered company. Instead, Sears appears to have badly lost its way. Lampert, who has said he intended to run Sears as a retailer, has so far neither returned the company to its former prowess, nor turned it into a Berkshire Hathaway-like investment vehicle, as some shareholders had hoped.

To be sure, Lampert, who made a fortune rescuing Kmart Holdings from bankruptcy protection and then used its reorganized stock to make an audacious bid for Sears in 2005, may still have some tricks up his sleeve. He could start selling off real estate, for example, although that will become harder if the economy continues to soften. But investors are clearly losing patience. After reaching a high of $195 in April, Sears (Charts, Fortune 500) shares are now trading around $100. Even analysts, who once spoke of Lampert in revered tones, are losing faith. “Eddie Lampert doesn’t have a clue how to fix Sears,” said Craig Johnson of Customer Growth Partners.

Data from Standard & Poor’s S&P/GRA Commercial Real Estate Indices shows that prices on commercial properties rose in August. The National Composite index was up 1.1% for the month and 6.2% for the 12-month period. You can find information on the indices here.

That’s more optimistic than data from Moody’s and the MIT Center for Real Estate that came out earlier this month. However, S&P’s report is based on older data. And even with the announcement, David Blitzer, Managing Director and Chairman of the Index Committee at S&P, noted that that commercial property price indexes were continuing their deceleration from an August 2006 peak.

More recent data from Real Capital Analytics shows that deal volume has dropped dramatically in the past couple of months. Volume on significant office properties ($5 million or more) was down 70 percent in October compared with the same month last year. Volume on significant retail properties was down 50 percent in both September and October.

(Previous posts on the S&P index can be found here and here.)

A Somali immigrant convicted for plotting to blow up an Ohio shopping mall has been sentenced to 10 years in prison.

In a 20-minute statement to the court, Abdi’s attorney Mahir Sherif said his client apologized to the people of the United States, the people of Ohio and the Muslim community. He said Abdi regretted that his conviction might lead to problems for other Muslims.

“He apologizes for the things he thought about and the things he talked about and the crimes he pleaded guilty to,” Sherif said. “He wants to make it very, very clear that he does not hate America.”

Prosecutors said Abdi made threatening comments about the unspecified shopping mall during a meeting with two other suspected terrorists on Aug. 8, 2002, at a coffee shop in suburban Columbus.

British retailer Tesco’s (TSCO.L) U.S stores have started well, it said on Tuesday, as the chain faced new protests from community groups who fear its marketing promises are not being translated into reality.

Tim Mason, chief executive of Tesco’s U.S. venture Fresh & Easy told more than 100 U.S. and European investors that customers have responded well since the chain launched in Los Angeles three weeks ago.

Its fresh food — one area Fresh & Easy has targeted as a way to differentiate itself from local rivals like Trader Joe’s — was “particularly well received,” Mason said.

The comments, released to the media on Tuesday, are Tesco’s first on the progress of the chain since stores opened on November 8 following months of speculation and high expectations from retail industry analysts.

More here.

ICSC released its same-store sales figures, which showed that same-store sales rose 2.5% compared with the same week last year. (PDFs of the press release and full report.)

Interestingly, for all the hoopla about Black Friday, the seasonally-adjusted same-store sales index actually dropped 0.1 percent from the week prior.

ICSC is projecting same-store sales to rise 2.5 percent in November. (The numbers will be released next Thursday) and thinks the holiday season as a whole will come at the same level.

Yet analysts at the investment bank said malls proved their defensive qualities during the last consumer-led recession in the early 1990s, noting that it takes almost two years of slowing sales before malls face falling rents. Investors can get exposure to the sector by investing in real estate investment trusts that specialize in retail properties.

“Even with declining sales, malls enjoyed healthy leasing spreads, rent growth, and occupancy,” UBS analysts wrote in a research note Monday. “We believe malls are better positioned today to weather slowing sales with higher occupancy levels, improved department stores, and a higher concentration of national public tenants.”

REITs have lost ground in 2007 after outperforming the U.S. stock market for seven consecutive years. Specifically, mall REITs have faced negative sentiment as investors worry falling home prices and the credit crunch will sap consumer spending.

Via MarketWatch.

The Boston Globe has a good report looking at all the work created for law enforcement agencies during the holiday shopping season.

It is a problem that police officers face in many communities with major retail destinations. The holiday season may be about peace on Earth and good will toward men - in theory. But police officers in Burlington, Braintree, Watertown, and other communities know otherwise.

Last year, three times a day, on average, between Thanksgiving and Christmas, Burlington police responded to calls at the Burlington Mall, an 86-acre retail giant just off Interstate 95 - far more than usual, according to police.

One store last year reported $2,300 worth of goods stolen. Three shoppers reported being scammed out of $10,600 by a con artist posing as a salesman selling plasma televisions. There were 25 car accidents reported to police within a few blocks of the mall - a figure that does not include minor fender-benders, police say, and so represents just a percentage of last year’s holiday shopping accidents. And then there were the arguments - usually over parking spots.

“That happens all the time,” said Burlington patrolman Jim Tigges. “Mostly, at Christmastime, it’s the usual. ‘Tis the season, we say. I had to break up two women fighting last year.”

Parking Today’s Blog raises an interesting idea meant to reduce the number of traffic jams in mall parking lots: Charge money for the closest spaces.

The premise is that too many shoppers only look at spots close to a mall or store’s entrance and they end up circling endlessly to get the spot, even if there are open spots further away or in, say, a basement or roof lot. As a result, parking lots get jammed with traffic even when there are enough spots to park. It’s an interesting idea. I wonder if anyone is willing to give it a try.

Charge for close in parking and make the further out parking free. Simply put staff on each floor or in each area and collect whatever amount it takes to get people’s attention. Spaces close in could be $5, those further out, $3 and the one’s around the curvature of the earth could be gratis. Some signage could communicate the deal, along with some good PR.

The staff could simply say, parking here is $5 but if you go down two more floors, Its free. Likewise for the close in, far out lots.

The absolute best way to change people’s habits is through their pocketbook. If $5 isn’t enough, make it $10. Take the money and use it to cover the cost of collection and put the rest in the Salvation Army buckets…