"The retail sales are just another sign of how much the economy is fueled by consumer spending," he says. "Economists have continually had to revise their estimates upward, and now it looks as if the first quarter growth will be close to 4 percent." Because there are signs of a slowdown ahead -- and none whatsoever of rising inflation -- the Fed is unlikely to step in. Not that that would upset anybody. "Americans feel great," Baumohl says. "They think that we're firmly in control in Kosovo, the Dow is over 10,000, and they don't see anything bad on the horizon. So they're back in the stores."
Economy Gets More Shop Therapy
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NEW YORK: The American dream, apparently, is on sale. "It's amazing -- Americans are still spending like drunken sailors," said TIME senior economics reporter Bernard Baumohl after the nation's biggest retail stores reported a mammoth surge in revenues for the month of March. Discount stores such as Wal-Mart, Kmart and Target reaped most of the profits, followed by specialty stores like Gap and Limited. But the biggest beneficiary of this mom-and-pop profligacy, says Baumohl, is the economy as a whole.