Consumer confidence in the country grew unexpectedly in September, following solid improvement in August, according to a report by the Conference Board. Consumers’ evaluation of current conditions remained extremely optimistic, as job and economy remained on a growth trajectory.

Rising consumer confidence also indicates consumers’ limited concerns about their nation’s ongoing trade disputes with China and other nations.

The improving confidence is reflected in spending, as consumers tend to spend more when they are confident about the economy. As consumer spending accounts for two-thirds of economic activity, its growth helps a number of industries thrive. This, along with seasonally high demand, should place retail companies at the front.

Let us take a look at some imperative facts before handpicking a few retail stocks to benefit from this situation.

Uptick in September Data Puts it Close to 18-Year High

Conference Board’s measure of the consumer confidence index for September stands at 138.4, up from 134.7 in August. September data is close to the all-time high of 144.7 achieved in May 2000.

Expectations Index, a sub-index that measures overall consumer sentiments for short-term (next 6 months) economic conditions, also moved up from 109.3 in August to 115.3 in September.

Major Beneficiaries of Rising Consumer Confidence  

According to Lynn Franco, Director of Economic Indicators at The Conference Board, the historically high confidence levels should continue to support healthy consumer spending and should be welcome news for retailers as they begin gearing up for the holiday season.

Particularly, Textile-Apparel and Shoes and Retail Apparel industries could gain among others and catch investors’ attention. Textile-Apparel has gained 24.7% year to date compared with S&P 500’s rally of 9.2% while Shoes and Retail Apparel has gained 27.9% since Jan 1.

Stocks to Buy

You may consider betting on the following stocks carrying a Zacks Rank #1 (Strong Buy) or #2 (Buy).