retail gains: where's money coming from?

what's wrong with this picture?

Retailers report solid gains for August - Houston Chronicle: "NEW YORK (AP) — Shoppers remained resilient in August despite wild stock market swings and worries about the U.S. economy, resulting in what's winding up to be a respectable back-to-school shopping season for many merchants.

However, the impact of Hurricane Irene, which ploughed through the Carolinas and up the Eastern Seaboard last weekend, hurt business for merchants, particularly clothing retailers. Retailers are still hoping to recoup lost sales in the next few weeks."

incomes are down, job losses continue, there is general pessimism about the direction of the economy, and yet retailers report increases in sales?

from personal experience, i know the retailers are aggressively courting shoppers, sometimes with outrageous promotions, just to get them into the stores. still, where's the money coming from the fuel the spending frenzy suggested by this headline?

it's either debt, or people (at least some people) are not doing nearly as badly as we've been led to believe. and that i find hard to accept.

so what is it? are we just ignoring the stop signs in our path, and headed full-speed off a cliff?