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Are Consumer ETFs Well-Positioned Ahead of Holiday Season?
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Key Takeaways
Strong GDP growth and improving consumer confidence support the holiday spending outlook.
Holiday sales could exceed $1 trillion, though inflation may account for much of the growth.
ONLN, XRT and PEJ offer exposure to online retail, apparel shopping and experience-based spending.
The U.S. economy expanded at a robust pace in the third quarter, supported by strong investment, consumer spending and government outlays.
Gross domestic product (GDP) grew at an annualized rate of 3.4%, according to the initial estimate released Thursday by the U.S. Bureau of Economic Analysis. The reading exceeded economists’ expectations of 3.1% and accelerated from the 2.2% growth recorded in the second quarter.
Inside Strong Consumer Spending
Consumer spending grew 3.8%, in line with the rate in Q2 and the strongest since the end of 2024, as quoted on Yahoo Finance. The Conference Board reported this week that consumer confidence is improving, despite sticky inflation and higher gas prices.
Upbeat Consumer Confidence
U.S. consumer confidence rebounded modestly in October as gas prices eased, but fuel remains more expensive than a year ago. Overall, the U.S. Consumer Confidence Index rose to 91.7 in October 2026, up from an upwardly revised 84.2 in September.TheExpectations Index roseby 6.9 points to 72.6, reflecting a short-term improvement in outlook for income and business.
Holiday Spending Set for Strong Growth?
U.S. holiday retail sales are expected to hit a record $1 trillion-plus during the November-December shopping season, according to Bain & Company. Sales are projected to rise 4.5% year over year, faster than the 3.5% growth seen in 2025.
However, the headline growth may look stronger than the underlying demand. Bain expects more than half of the increase to come from higher prices, meaning inflation will account for a significant portion of the sales growth.
The National Retail Federation predicts retail sales in November and December will rise 4.2% over 2025. That translates to total spending of $1.013 trillion. By comparison, last year’s holiday sales rose 3.1% over 2024, totaling $972 billion. The last time retail sales growth reached 4% was in 2022. About 91% of consumers plan to celebrate the winter holidays this year.
Meanwhile, Mastercard Economics Institute expects U.S. retail sales, excluding autos and gas, to rise 5.5% year over year from Nov. 1 to Dec. 24, marking the strongest holiday growth since 2022. Healthy employment, wage gains and household wealth are supporting consumer spending, although higher-income households are likely driving much of the strength.
Spending to Touch All-Time High This Halloween
About 74% are planning to celebrate this year, on par with 73% last year. On the other hand, 96% will likely shell out around $4.1 billion on candies. As much as 78% of consumers will spend about $4.3 billion on decorations, 71% of shoppers are expected to spend $4.4 billion on costumes, and 42% will pay nearly $800 million for greeting cards.
Online remains the top holiday shopping destination, but planned participation fell to 53%, the lowest since 2015, per NRF. It is an Amazon-heavy ETF. The fund has added 6.3% over the past month (as of Oct. 29, 2026).
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is a modified equal-weight index.
XRT puts 20% weight in apparel. With clothing shopping taking center stage this holiday season, betting on XRT would be a good idea. The fund has added about 8% over the past month.
Invesco Leisure and Entertainment ETF (PEJ - Free Report)
The fund comprises stocks of U.S. leisure and entertainment companies. The underlying Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
About 27% of holiday shoppers plan to gift experiences, up from 19% five years ago, led by Gen Z, per NRF. Wish lists vary by generation: Clothing and accessories top the lists for Gen Z (51%) and Millennials (50%), while gift cards lead for Gen X (46%) and Boomers (59%). The fund has added about 6.8% over the past month (as of Oct. 29, 2026).
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Image: Bigstock
Are Consumer ETFs Well-Positioned Ahead of Holiday Season?
Key Takeaways
The U.S. economy expanded at a robust pace in the third quarter, supported by strong investment, consumer spending and government outlays.
Gross domestic product (GDP) grew at an annualized rate of 3.4%, according to the initial estimate released Thursday by the U.S. Bureau of Economic Analysis. The reading exceeded economists’ expectations of 3.1% and accelerated from the 2.2% growth recorded in the second quarter.
Inside Strong Consumer Spending
Consumer spending grew 3.8%, in line with the rate in Q2 and the strongest since the end of 2024, as quoted on Yahoo Finance. The Conference Board reported this week that consumer confidence is improving, despite sticky inflation and higher gas prices.
Upbeat Consumer Confidence
U.S. consumer confidence rebounded modestly in October as gas prices eased, but fuel remains more expensive than a year ago. Overall, the U.S. Consumer Confidence Index rose to 91.7 in October 2026, up from an upwardly revised 84.2 in September.TheExpectations Index roseby 6.9 points to 72.6, reflecting a short-term improvement in outlook for income and business.
Holiday Spending Set for Strong Growth?
U.S. holiday retail sales are expected to hit a record $1 trillion-plus during the November-December shopping season, according to Bain & Company. Sales are projected to rise 4.5% year over year, faster than the 3.5% growth seen in 2025.
However, the headline growth may look stronger than the underlying demand. Bain expects more than half of the increase to come from higher prices, meaning inflation will account for a significant portion of the sales growth.
The National Retail Federation predicts retail sales in November and December will rise 4.2% over 2025. That translates to total spending of $1.013 trillion. By comparison, last year’s holiday sales rose 3.1% over 2024, totaling $972 billion. The last time retail sales growth reached 4% was in 2022. About 91% of consumers plan to celebrate the winter holidays this year.
Meanwhile, Mastercard Economics Institute expects U.S. retail sales, excluding autos and gas, to rise 5.5% year over year from Nov. 1 to Dec. 24, marking the strongest holiday growth since 2022. Healthy employment, wage gains and household wealth are supporting consumer spending, although higher-income households are likely driving much of the strength.
Spending to Touch All-Time High This Halloween
About 74% are planning to celebrate this year, on par with 73% last year. On the other hand, 96% will likely shell out around $4.1 billion on candies. As much as 78% of consumers will spend about $4.3 billion on decorations, 71% of shoppers are expected to spend $4.4 billion on costumes, and 42% will pay nearly $800 million for greeting cards.
ETFs to Play
Amplify Online Retail ETF (ONLN - Free Report)
Online remains the top holiday shopping destination, but planned participation fell to 53%, the lowest since 2015, per NRF. It is an Amazon-heavy ETF. The fund has added 6.3% over the past month (as of Oct. 29, 2026).
State Street SPDR S&P Retail ETF (XRT - Free Report)
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Retail Index is a modified equal-weight index.
XRT puts 20% weight in apparel. With clothing shopping taking center stage this holiday season, betting on XRT would be a good idea. The fund has added about 8% over the past month.
Invesco Leisure and Entertainment ETF (PEJ - Free Report)
The fund comprises stocks of U.S. leisure and entertainment companies. The underlying Index seeks to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including fundamental growth, stock valuation, investment timeliness and risk factors.
About 27% of holiday shoppers plan to gift experiences, up from 19% five years ago, led by Gen Z, per NRF. Wish lists vary by generation: Clothing and accessories top the lists for Gen Z (51%) and Millennials (50%), while gift cards lead for Gen X (46%) and Boomers (59%). The fund has added about 6.8% over the past month (as of Oct. 29, 2026).