However, we are still waiting on wage growth to catch up to the boom. When the economy is at full employment, wages grow about 3% to 3.5% per year, but wages are only rising 2.5% so far.
Supporting an increase in spending, consumer confidence rebounded to its strongest level in almost a year in May, according to the Wall Street Journal.
“Consumer sentiment rebounded in early May due to more frequent income gains, an improved jobs outlook and the expectation of lower inflation and interest rates,” Richard Curtin, the chief economist for the University of Michigan consumer sentiment index, told the WSJ.
Investors can tap into the growth in the consumer discretionary sector through a number of broad and targeted ETF options.
Consumer discretionary ETFs:
- Consumer Discretionary Select Sector SPDR (NYSEArca: XLY)
- First Trust Consumer Discretionary AlphaDEX Fund (NYSEArca: FXD)
- Vanguard Consumer Discretionary (NYSEArca: VCR)
- iShares US Consumer Services ETF (NYSEArca: IYC)
- SPDR S&P Retail ETF (NYSEArca: XRT)
- iShares Global Consumer Discretionary ETF (NYSEArca: RXI)
- Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS)
- PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ)
- VanEck Vectors Retail ETF (NYSEArca: RTH)
- PowerShares Dynamic Media Portfolio (NYSEArca: PBS)
- Guggenheim S&P Equal Weight Consumer Discretionary ETF (NYSEArca: RCD)
- PowerShares S&P SmallCap Consumer Discretionary Portfolio (NasdaqGM: PSCD)
- PowerShares DWA Consumer Cyclicals Momentum Portfolio (NYSEArca: PEZ)
- First Trust NASDAQ Global Auto Index Fund (NasdaqGM: CARZ)
- PowerShares Dynamic Retail Portfolio (NYSEArca: PMR)
- Market Vectors Gaming ETF (NYSEArca: BJK)
- John Hancock Multifactor Consumer Discretionary ETF (NYSEArca: JHMC)
- SPDR S&P International Consumer Discretionary Sector ETF (NYSEArca: IPD)
- Restaurant ETF (NasdaqGM: BITE)
- iShares Edge MSCI Multifactor Consumer Discretionary ETF (BATS: CNDF)
- Amplify Online Retail ETF (NASDAQ: IBUY)
For more information on the consumer sector, visit our consumer discretionary category.