A robust labor market, steadily rising wages and strong household finances have resulted in a surge in household spending across the United States. Further, clothing remains the preferred gift item ahead of what is expected to be a record-breaking holiday shopping season.

Even though consumer spending showed signs of cooling last month, industry experts believe that overall spending would cross the $1 trillion mark this season. By the way, U.S. retail sales have already gathered steam in October. Under such encouraging conditions, it makes buying mutual funds that invest in leisure, discretionary and transportation companies prudent.

Holiday Season to Shatter Records

Per a report published on Nov 5 by leading market research firm eMarketer, Americans are likely to spend more than $1 trillion this holiday season. The report states that consumers in the United States would spend approximately $1.002 trillion from Nov 1 through Dec 31 this year.

Further, the report estimates that e-commerce sales would surge 16.6% to $123.73 billion, representing about 12.3% of the total retail sales this holiday season and would be the primary catalyst for growth in retail sales. Notably, though brick-and-mortar retailers still eat up approximately 87.7% of the pie.

Meanwhile, traditional retailers are continuously trying to up their game. Retail giant Target has already released its Black Friday ad for 2018. Online retailers are not far behind in the game. Amazon announced on Nov 5 that all its members from the United States and not only Prime members would be eligible for free shipping this holiday season.

Consumers Spend Generously

Per the Commerce Department’s GDP data released on Oct 26, consumer spending on clothing and footwear rose 11.7% year over year last quarter. This marked its biggest increase since 2005. Moreover, this helped in boosting consumption of non-durable goods to its fastest pace in about five years. Notably, apparel spending accounts for about 3% of consumer spending.