3 Reasons Americans Are Shopping

By Derek Thompson

US retail sales rose 5.7% in April, after a 7.8% jump in March, which was the best year-over-year improvement since August 2005 at the peak of the housing boom. But unemployment is near 10 percent. Why are Americans shopping? Three quick theories.

1) People are skipping mortgage payments to go to the mall. Yep, it's a theory.

2) Low prices. The upside of really, really low inflation -- April saw the smallest 12-month increase in consumer prices since 1966 -- is that stuff is cheap if you have money to spend. Mass market retailers like Wal-Mart and Home Depot both slashed prices through March on thousands of products. Falling energy prices, helped along by trouble in Europe, also free up wallet space.

3) The stock market. Ben Steverman at BusinessWeek reports: "Fidelity Investments said May 19 its average account balance rose more than 55 percent from Mar. 9, 2009--the market's lowest point last year--to Mar. 9, 2010."

This article available online at:

http://www.theatlantic.com/business/archive/2010/05/3-reasons-americans-are-shopping/57031/