WASHINGTON (TheStreet) -- The retail forecast for the next six months suggests the holiday shopping season has already begun.
Despite some ominous signs in May -- including a 1.2% decrease in retail sales, a 2% drop in existing-home sales and a 33% collapse in new-home sales -- the retail community found reasons for optimism. Consumer confidence jumped 5.6% to its highest level since September 2008, while the University of Michigan's Consumer Sentiment Index rose to 76 last week from 73.3 in May and beat economists' forecast of 75. It may seem small, but with Toys "R" Us announcing earlier this month that it's setting up a "Christmas Savers Club" for its customers, a little optimism goes a long way.
The National Retail Federation expects disposable income to rise 2.5% this year and spending to increase 3%, citing the addition of a million new jobs and an improvement in the housing market. While it acknowledges that nearly half of those new jobs are government and census-worker positions, which don't come close to restoring the more than 8 million jobs lost during the recession, and that the expiration of the homebuyer credit could play havoc with housing, it sees even minimal job creation and low mortgage rates as steps in the right direction.
So where is this newfound windfall going in the next six months? If the Commerce Department's estimate of 7.5% retail growth in the first five months of this year are any indication, it should be a happy holiday season in several categories. Online retailers like Amazon (AMZN) - Get Report , eBay (EBAY) - Get Report and Overstock.com (OSTK) - Get Report , for example, saw a 13% spike in business in the first five months compared to 2009 as frugal shoppers went digging for deals.
(AMZN) - Get Report (EBAY) - Get Report (OSTK) - Get Report Clothing sales, meanwhile, jumped 4.7% in the first half as retailers such as Urban Outfitters (URBN) - Get Report and The Limited (LTD) saw gains and a survey by BIGResearch found that 13% of respondents felt it was time to spend on apparel for themselves. There's not going to be enough room for everyone at the holiday table: Department store sales fell 0.6% in the same period.
(AMZN) - Get Report (EBAY) - Get Report (OSTK) - Get Report (URBN) - Get Report (LTD) Speaking of luxury, MasterCard's (MA) - Get Report SpendingPulse tracked double-digit growth in that category for three out of the past five months, with luxury spending up 9.7% in May alone. Tiffany (TIF) - Get Report and Saks (SKS) may as well hang the garland now, as a strong first half were an early present and fueled nearly 3% growth in overall luxury department-store spending.
(AMZN) - Get Report (EBAY) - Get Report (OSTK) - Get Report (URBN) - Get Report (LTD) (MA) - Get Report (TIF) - Get Report (SKS) Though consumers are less generous when it comes to buying new homes, Home Depot (HD) - Get Report and Lowe's (LOW) - Get Report gift cards won't go to waste in the second half. Spending at building and garden supply retailers is up nearly 4%, with Home Depot and Lowe's predicting up to 6% growth this year. The researchers are backing them up, with BIGResearch saying 13% of its respondents will splurge on home improvements this year, Harvard's University Center for Joint Studies predicting 5% growth in the sector and American Express' Spending and Saving Tracker finding that 85% of respondents will spend an average of $6,200 on their homes before next January.
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