Although obviously reeling from pain, tennis great Andre Agassi somehow managed to wrap up his 21-year career last week by struggling through a tough, turbulent and losing four-set match at the U.S. Open.

Lo and behold, the financially strapped consumer may be stealing some of Mr. Agassi’s thunder by displaying similar stamina. Despite repeated reports of his death, the average consumer, though riddled with debt and saddled with negative savings, stagnant wages, falling home prices, a slowing economy, and higher prices at the gas pump, is proving to be a lively corpse.

Indicative of this, the back-to-school and back-to-college selling season, one of the busiest of the year for the nation’s merchants, is off to a reasonably peppy start, I’m told by representatives of retailing biggies Wal-Mart and J.C. Penney.

This sales vigor may help alleviate fears in some quarters that retailing, given the consumer’s growing financial strains, is ready to fall off the cliff. To the contrary, initial back-to-school sales suggest the consumer is not about to roll over and play dead. Given that consumer spending represents two-thirds of the economy, this could suggest economic prospects for the fourth quarter may be stronger than expected.

“Back-to-school sales are shaping up better than I thought and I hear that’s the case throughout the chain,” says one Wal-Mart merchandise manager. The current sales tempo is also signaling to a J.C. Penney spokesman that “Christmas 2006 may not be the dog that a lot of people anticipate.”

Maybe not, but the skeptics are numerous. For example, in a recent commentary to clients, Raymond James Financial’s chief investment strategist, Jeffrey Saut, warned of the mounting economic risks surrounding the trend in consumer spending. It appears, he wrote, based on recent reports from numerous retailers and casual dining chains, the consumer is reining in his spending habits,

This mind-set, he notes, is also being seen in consumer sentiment polls such as the University of Michigan’s Consumer Confidence Index, which fell to 78.7 last month from 84.7 in July, leaving consumers at their gloomiest levels since 1993 and more downbeat than they were following the attacks of September 11, 2001. Equally disconcerting, he wrote, is that the “current conditions” component of the U&M report slid to 100.8 from 103.5, while the forward-looking component collapsed to 64.5 from 72.5.

Discussing the plight of the consumer, Mr. Saut notes that 50% of the country’s wage earners are struggling under the burden of higher mortgage payments and $3-a-gallon gasoline. The median family, he points out, has about $3,800 in the bank, does not have a retirement account, has a home worth $160,000 with a mortgage of $95,000, owns no mutual funds, stocks or bonds, earns about $43,000 a year and struggles to pay off its $2,200 in credit card debt.

Still, Standard & Poor’s argues that the consumer is no financial dud. Although consumers are increasingly pinching their pennies, it contends the overall health of the economy remains strong and predicts a 3.5% gain in this year’s back-to-school sales and a 2.5% rise in consumer spending over the balance of the year.

In addition to an okay 2006 economy, spurred by what it sees as a 3.1% growth in consumer spending for the entire year, versus a 3.5% gain in 2005, the advisory sees back-to-school sales also benefiting from supportive school enrollment trends. Projections call for a 0.5% increase in public primary and secondary enrollment, and a 1.5% increase this year in traditional four-year college enrollment.

In line with its enthusiasm for the retail sector, S&P is pitching eight stocks it thinks can generate gains ranging from 13% to 37% over the next 12 months. The names, plus the 12-month targets shown in parentheses, follow: Abercrombie & Fitch (29%), American Eagle Outfitters (13%), Best Buy (37%), Kohl’s (13%), Staples (21%), Target (14%), The Children’s Place (23%) and Wal-Mart (27%).

Looking at specialty retailers, S&P analyst Michael Sobers expects slowing growth for the majority of the companies. Nonetheless, he looks for solid earnings growth due to cost-cutting initiatives and share buybacks. What are the best ways to capitalize on this group? The analyst notes parents will forgo a lot of things before they cut into their child’s allowance or downgrade their pet’s lifestyle. As such, the specialty retail focus, he said, should be on children and pets. His trio of favorites in this area: Claire’s Stores, Build-a-Bear Workshop and PetsMart.

The bottom line: If indeed the consumer is not the financial weakling that he’s supposedly cracked up to be, look for a better-than-expected 2006 economy.