The National Retail Federation (NRF) and other consumer groups have increased their projections for holiday sales growth after the U.S. Commerce Department reported higher-than-expected November retail sales earlier this week.

Higher incomes and increased consumer confidence have heightened expectations for the season, and NRF now predicts a 3.3% increase in holiday sales—up from an earlier estimate of 2.3%. "The start to the holiday season has surpassed all expectations," said NRF President and CEO Matthew Shay, who cautioned that sustained sales growth beyond the season depends on an improved employment picture.

The NRF said retail sales in November were up 6.8% compared with the same month last year, with clothing stores leading the way.

Another group, the International Council of Shopping Centers, also raised its holiday forecast range this week by 0.5 percentage points to between 3.5% and 4% because of retailers' strong November sales, saying it expects the strongest holiday season since 2005.

The Commerce Department said Tuesday that its broader measure of total retail sales rose 0.8% last month, beating economists' forecasts, Reuters reported. Earlier this month, 27 top U.S. retailers, ranging from Macy's to Target, reported sales at stores open at least a year rose 6% in November, handily beating forecasts.

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