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The Month of May Was Favorable to Discount Retailers

By Erik Folgate

Retailers Such as Costco and Wal-Mart posted higher than expected earnings for the month of May. All of the major media outlets are referring to this as a result of the first wave of economic stimulus payments rolling out in May. But, take notice at what types of stores did well. It was discount retailers that did well, not mall retailers. The article I referenced to on Yahoo Finance indicated that the Gap and American Eagle had worse earnings than expected due to the stimulus payments.

What this tells me is that the American people are doing exactly what i thought they would do. Spend some on necessities and save the rest. Bare with me for a minute while I step on my soap box. Why is it that the media and the government judge the health of the economy by how much money we are spending? Theoretically, we could all go out and max out our credit cards to buy crap that we don’t need, and the economy would be stimulated. But, about six months from now our financial situation would be horrible, because all of our disposable income would be going to credit card bills.

I am glad that for the first time in about six months, the media had some positive news to report about the economy, but it aggravates me that the only way they judge the health of the economy is by how much money we spend. So, don’t listen to the media. Use your stimulus payments to pay down debt, catch up on a revolving payment, or save in your IRA. If you’re already doing all of that and you want to buy a television or go on vacation, then by all means, go ahead. But don’t let the media and the government pressure you into it.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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