Consumer spending, which accounts for almost 70 percent of the economy, rose at a 2.5 percent pace last quarter, more than twice the rate in the first three months of 2014. The spending may be driven by optimism that job growth will continue after the U.S. economy added 209,000 jobs in July, the sixth straight month of gains above 200,000.

Earnings Results

So far this quarter, 77 percent of the consumer discretionary companies in the Standard & Poor’s 500 Index have exceeded analysts’ earnings estimates, more than the 75 percent average for the full index. All six of the apparel companies that have reported results so far, including New York-based Ralph Lauren, beat profit estimates.

The quarterly earnings results helped push the S&P 500 to a record 1,987.98 on July 24, about a week after the Dow Jones Industrial Average peaked at 17138.20. The indexes have since retreated, influenced in part by Argentina’s default and expanded sanctions against Russia by the U.S. and European Union. The S&P 500 Consumer Discretionary Sector Index has risen about 9.8 percent in the past year.

Price Competition

Even with the economic improvement, some retailers are suffering as consumers continue to bargain-hunt. Target Corp. this week said second-quarter profit trailed its forecast as revenue at established U.S. stores was little changed, and Wal- Mart Stores Inc. is reducing prices on 10 percent more items during this back-to-school season.

One reason consumer spending has been slow to rebound since the end of a recession in 2009 is a greater concentration of wealth and income among the richest Americans, said Joseph Stiglitz, a Nobel-prize winning economist and author of “The Price of Inequality.”

Investors may be positioning themselves to benefit from gains in retail companies during the crucial fourth quarter compared with the 2013 season, when bad weather and price competition among retailers hurt sales.

The depressed valuations and easy comparisons could be a compelling opportunity for investors, Lawrence Creatura, who helps oversee $350 billion as a fund manager at Pittsburgh-based Federated Investors Inc., said in an interview.

Holiday Season