YOU don’t have to be a close reader of the business pages to know that the free-spending American consumer gets the credit for keeping the US economy from slipping into a serious recession. What is less heralded is just how the supply side of the economy has contributed to the willingness of American consumers to put their hard-earned and easily borrowed dollars to work shoring up the economy.

Let’s start with Wal-Mart, as any discussion of the retail sector must. With revenues of almost $250 billion (£150 billion) it is the world’s largest company. As Business Week pointed out in a recent cover story: “Every week, 138m shoppers visit Wal-Mart’s 4,750 stores; last year, 82% of American households made at least one purchase at Wal-Mart.”

For President George Bush that is both good and bad news. The good news is that Wal-Mart’s use of its mass buying power to keep its costs, and therefore consumer prices, low has made it unnecessary for the Federal Reserve Board’s monetary policymakers to worry that low interest rates will trigger inflation.

The bad news for the president and his policymakers is that Wal-Mart’s purchases account for some 10% of America’s trade deficit with China, which manufacturers and trade unions complain is costing American workers their jobs.

To cool things down at home and head off congressional pressure to impose tariffs on Chinese goods, Bush will use the Asia- Pacific Economic Co-operation (Apec) conference later this week to press China to allow its currency to float upwards so as to make its goods less competitive in the American market.

But even if he gets what he wants, the increase in retail prices should not be great, given Wal-Mart’s power vis-à-vis its suppliers. So the company will continue to dominate the pile-’em-high-and-sell-’em-low segment of the retail market and keep customers spending.

The emergence of Wal-Mart is not the only revolution on the selling side of the consumer market. The internet, discounted as a force when the dotcom bust hit the high-tech sector, is finally making an impact on consumer markets.

Books and CDs have always been products that e-tailers can move. But consumers are now using the internet for purchases of clothing, something few thought would ever happen. Comscore Networks estimates that in the past year consumers’ online spending on clothes and accessories rose 31% to $7.3 billion.

Another consultancy, Jupiter/ Ipsos, estimates that between 16% and 25% of Americans purchased a product or service online. This is why Barry Diller’s InterActive, which includes the Expedia travel agency, general television and web retailer HSN, Ticketmaster and other e-commerce operations, is expecting revenues to rise by 34% this year to $6.2 billion.

Not only must the retail segment accommodate a growing web segment. It must also find a way of separating increasingly affluent and fickle youngsters from funds that now consist of a lot more than the measly allowances of yesteryear. Youth will be served — and well served — or else.

Teenagers last year spent about $120 billion in the shops, 40% of it on clothing and accessories, according to Trevor Delaney, writing in SmartMoney. Not for them any item that is “so five minutes ago”, meaning that retailers now have to be more fleet of foot than ever to guess just what will strike the fancy of this with-it crowd. That means low inventories, quick adjustments of ad campaigns, and the risk of rack upon rack of discounted merchandise.

Adding to the turmoil in the retail sector is the demand of many customers for something more than good prices or an easy transaction. They want a shopping experience. This is forcing many malls to become what can only be described as destination resorts.

The 150 malls managed by General Growth Properties cover America, and in addition to their 15,000 stores, include theatres, ice-skating rinks and other forms of family entertainment.

In Minnesota, during the peak shopping season, 900,000 customers per week visit the Mall of America's 4.2m sq ft (“big enough to hold 32 Boeing 747s”, boasts its website). That mall is home to more than 520 shops, over 80 places to eat and eight nightclubs, and there have been 2,500 marriages there since it opened.

This means that in addition to the cheery service and low prices of a Wal-Mart, consumers can boost the economy in the more pricey shops that populate the shopping malls that offer “free” entertainment and a place to socialise. The Pentagon mall in Washington DC opens early to allow pensioners to use its oval balcony as a running — well, walking — track.

And for those for whom fashion counts, there are always the boutiques with their top brands. It isn’t the unwearable dresses of the catwalks of New York, Paris and Milan that really matter: it is the accessories that have kept the tills ringing. Handbags and such account for 70% of Gucci’s sales and 60% of the profits of LVMH, and they are expected to fuel a 10%-20% rise in that sector this year.

And while female customers are choosing from ever-widening lines of fashion accessories, what Forbes magazine calls the “metrosexual male”, modelled on “David Beckham, the tough soccer player who isn’t afraid to wear sarongs and nail polish (off the field)”, is buying cosmetics, defoliating, and choosing among washers and dryers designed specifically for men.

In short, consumers may be the heroes of the economic recovery. But sellers have done their bit by keeping prices low for price-conscious consumers, expanding the number of ways in which customers can order goods and services, putting fun into buying, and dazzling the high rollers with great products. They deserve a bit of credit, too.

• Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute