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In this July 30, 2010 photo, teenagers enter a Juicy Couture clothing store that features a window display with back-to-school fashion, in New York. The nation's retailers are reporting surprisingly solid gains for August, helped by aggressive discounting, even as unusually hot weather and job worries kept a lid on back-to-school buying. (AP Photo/Mark Lennihan)

Mark Lennihan

In this July 30, 2010 photo, teenagers enter a Juicy Couture clothing store that features a window display with back-to-school fashion, in New York. The nation's retailers are reporting surprisingly solid gains for August, helped by aggressive discounting, even as unusually hot weather and job worries kept a lid on back-to-school buying. (AP Photo/Mark Lennihan)

Discounts spur surprising August retail sales gains

By Anne D'innocenzio

The Associated Press

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NEW YORK — American shoppers, taking advantage of deep discounts and tax-free holidays, opened up their wallets a little more for back-to-school spending compared with last year, giving some retailers better-than expected gains for August.

The results provided a sliver of hope for the recovery amid an unrelenting batch of bad news, from slumping home prices and high unemployment, that have pointed to a stalling economy and set up dire expectations for the back-to-school shopping season. Still, the retailers' gains mask underlying weakness in consumer spending as they're being compared with declines a year ago and worries still abound about the critical holiday season.

Shoppers remain selective and are focusing on the necessities, a trend that is expected to continue through at least the holiday shopping season.

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