The labor market is gaining momentum and retailers are set to report earnings next week.
Along with the labor market, other signs are also pointing to a solid performance for retailers as they head into the strongest sales season of the year.
October posted the best numbers on monthly jobs creation this year, and gasoline prices remain low right before the start of the holiday shopping season.
“The consumer should be feeling pretty good heading into the last couple of the months of the year,” Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute in Omaha, told Reuters. “We think we could be set up for a little bit of a (stock market) rally here into year-end.”
Retailers are set to announce their October sales by Friday the 13th. Those numbers are expected to show a 0.3 percent month-on-month increase after a 0.1 percent gain in September.
Among major retailers set to share their numbers are Macy’s, Kohl’s, Nordstrom, and J.C. Penney.
The strong jobs report showed that workers are starting to see their first pay increases in years, another sign that holiday spending should be up for the 2015 holiday shopping season. Hourly earnings are up 2.5% this year.
While higher wages across the board are good for workers, some companies, such as Wal-Mart are now paying more to employee their massive workforces, a fact they warn will eat into their overall profits.