After a long slumber, U.S. consumers might finally be waking up to add their weight to the U.S. recovery.

Existing-home sales jumped 10% in September, rising for the second month in a row, figures showed Monday. While the increase was largely just a rebound from depressed levels following the end of a tax credit in the summer, the housing market at least appears to be stabilizing.

Meanwhile, retail sales came in stronger than expected in September, with the U.S. government revealing spending in the previous two months was better than initially reported. Expectations are starting to emerge that consumers will boost their discretionary spending in the fourth quarter.

“I think retail sales are going to be a little better than expected [during the holiday season],” said Joseph Carson, director of global economic research at AllianceBernstein LP in New York. “Consumers’ fundamentals are better, and I think their pace of spending will pick up over time.”

Better fundamentals are owed almost exclusively to a trend of U.S. households paying off debt faster than expected.

Consumer credit has fallen nearly every month since the summer of 2008. During the second quarter of this year, debt payments as a share of disposable income dropped to 12.1% — the lowest in a decade.

Mr. Carson said the fact that households have deleveraged so much is significant. In the past, consumer spending tended to pick up after recessions through income growth, rather than such a noticeable level of debt reduction.

It is not an overly rosy picture, however. Despite the improvement in consumer fundamentals, overall confidence remains low.

Confidence among U.S. consumers unexpectedly declined this month, with the University of Michigan preliminary index of consumer sentiment decreasing to 67.9 — the lowest since July, and down from 68.2 in September.

Low consumer confidence isn’t necessarily a bad thing though, says Murray Leith, vice-president and director of investment research at Odlum Brown in Vancouver.

“Consumer confidence is a lagging economic figure, meaning it does a good job of doing what the economy and stock market have just done — if the stock market has [been] poor, consumer confidence is poor,” he said.

Mr. Leith said if past trends hold true, then consumer confidence will steadily rise over the next year — along with the stock market.

Consumer discretionary stocks — weighed down by retailers, which cater to the recession-battered middle class — are likely to benefit as a result.

Andrew Pink, vice-president and portfolio manager at Thornmark Asset Management Inc. in Toronto, echoes that view.

“We’re definitely more concentrated in discretionary, and we definitely think the consumer is coming back,” he said. “Our thoughts are that we’re going to see a continued recovery, and it’s going to be driven by consumer demand and spending.”

U.S. consumer purchases rose 2.2% in the second quarter, and could see another strong showing when the Commerce Department releases third-quarter data on Friday.

But Paul Dales, U.S. economist at Capital Economics, cautioned that with an unemployment rate still hovering near 10%, and a U.S. consumer that remains highly leveraged, the obstacles to stronger consumer spending are still considerable.

“I think it’s very possible we could get some sort of acceleration in consumption growth, but I think it’s unlikely,” he said. “The headwinds against the consumer are just really strong at the moment.”