Falling gas prices. Soaring stock market. Unemployment at a six-year low.
All signs point to a successful holiday shopping season. Despite the economic tail winds, though, retailers are having to work to get shoppers into stores.
Why? Five years into the economic recovery, most Americans still are struggling.
Gas prices may be near a four-year low, but Americans are paying more for food, health care and other costs. Unemployment is falling, too, but wage growth has been stagnant. And even though the financial and housing markets have improved, Americans haven't changed their deal-hungry shopping habits.
"Retail therapy is out the window for most Americans," said Ken Perkins, president of research firm RetailMetrics.
Not that this holiday season is expected to be a dud. In fact, the National Retail Federation forecasts holiday sales will grow 4.1 percent to $616.9 billion — the highest increase since 2011. But retailers already have had to resort to discounting to get shoppers into stores.
Heavy discounting eats into profits. For example, over the past weekend, online sales rose 18.7 percent, but the average order value was $112.86, down 5.4 percent from the same period a year ago because of promotions, according to IBM Digital Analysts Benchmark, which tracks sales at 800 websites.
Reflecting the tough environment, major department stores, including Macy's, JCPenney and Kohl's, reported sales shortfalls in the quarter preceding the holiday shopping season. Discounters like Target and Walmart turned in better-than-expected sales, but acknowledged that shoppers are cautious.
Here are three reasons many Americans plan to spend conservatively this holiday season, even though economic factors have improved:
SLOW WAGE GROWTH: Paychecks have barely stayed ahead of inflation since the recession ended more than five years ago.
Average hourly wages, adjusted for inflation, rose just 0.3 percent in September from a year earlier. And many Americans who once worked full time now have part-time jobs.
HIGHER COSTS: Gas prices have fallen about 20 percent from a year ago, putting an average of about $50 a month into the pockets of American households. But they're still grappling with higher costs on lots of other necessities like food and health care.
Overall food prices are up 1.7 percent from a year ago, according to the latest consumer price index. Meat prices are up 8.5 percent, while egg prices have risen 6.7 percent.
SHOPPERS WANT DEALS: According to a recent survey of 500 U.S. shoppers by Accenture, 29 percent said it would take a discount of 50 percent or more to persuade them to make a purchase. Two years ago, that figure was 21 percent. That's why a number of retailers have been heavily discounting holiday items all month. A survey of 100 retailers by consultancy BDO found that 34 percent will have already run most holiday deals by the time shoppers sit down for their Thanksgiving dinner.
"Everyone is still looking for a deal," said Mikael Thygesen, chief marketing officer at Simon Property Group, which operates 228 shopping centers.