The retail industry's trade group, the National Retail Federation, raised its forecast for holiday retail sales to 3.3 percent from a prior forecast of 2.3 percent.
The increased forecast comes on the back of abetter-than-expected retail sales report from the Commerce Department, which showed U.S. retail sales rose 0.8 percent, following a 1.7 percent gain in October.
According to the NRF, retailers have coaxed consumers to start spending again by offering aggressive sales promotions this holiday season.
"Things are starting to look really good for the consumer and for retail," said Scott Krguman, a NRF spokesman told CNBC. "We've known for a while that consumers have actually been sitting on some spending power, they just haven't had the confidence to use it. Clearly, retailers with the discounts they have for the holiday season are reaching the consumer and getting them to loosen those purse strings just in time."
Still, this isn't a sign that consumer spending has turned the corner. The unemployment rate remains high and that could keep a lid on consumer spending as we head into next year, according to Krugman.
The trade group alters its holiday sales forecast very rarely. The last time they offered a revision was in 2006.