The National Retail Federation raised its holiday sales forecast, saying stock market gains and higher income have lifted consumer confidence and given shoppers the ability to spend more this year.
The U.S. industry group is now expecting retail sales in November and December, excluding cars, gasoline and meals at restaurants and online sales, to be up 3.3 percent, compared with its previous forecast of an increase of 2.3 percent.
The start to the holiday season has surpassed all expectations, NRF President and CEO Matthew Shay said in a statement. But Shay warned that sustained improvement in retail sales would hinge on unemployment easing.
The NRF said retail sales in November were up 6.8 percent compared with the same month last year, with clothing stores leading the way.
The U.S. Commerce Department said on Tuesday that its broader measure of total retail sales rose 0.8 percent last month, beating economists' forecasts.
Earlier this month, 27 top U.S. retailers, ranging from department store operator Macy's Inc
The S&P Retail Index <.RLX>, which last year hit a 3 1-2 year high, was down 0.4 percent Tuesday morning.
(Reporting by Phil Wahba, editing by Matthew Lewis)