Willingness to take on credit card debt, not rising incomes, is responsible for the uptick in consumer spending, according to AAA.
Closer to home, more than 548,000 from the Philadelphia-area will travel between Wednesday and Sunday, a 1.3 percent increase and 35 percent more than traveled Memorial Day weekend.
In New Jersey, 1.2 million will take trips - more than 1 million will travel by car, up 1.9 percent.
"Steady improvement in the economy has spurred increased consumer confidence and spending," said Jenny Robinson, spokeswoman for AAA Mid-Atlantic.
Continued improvements in employment and rising home values make consumers more comfortable to take on debt, AAA said.
Gas prices are 18 cents a gallon higher than last July Fourth, when the national average for regular unleaded was $3.50 per gallon. The price Sunday was $3.68.
The average per-gallon price in the five-county Philadelphia area was $3.79. In southern New Jersey, it was $3.55.
Typically, gas prices fall in the weeks leading up to July Fourth, but not this summer, due to high crude-oil costs and the violence in Iraq, said Shane Norton, head of the IHS Global Insight team that put together the AAA travel projections.
"Prices are about where they were a month ago, but typically that's not the case. Last year, gas prices peaked on May 23 and went on a slow but steady fall through July 4," Norton said. "This year, they have hung around at $3.66 or so since Memorial Day."
Gas prices will not hamper travel, but may cause consumers to cut back on spending for food and shopping.
Since summer 2008 - when gas hit $4.10 a gallon - "the economy is in a much better place," said Mark Zandi, chief economist at Moody's Analytics. "Consumer confidence is up, and people are just feeling a lot better.
"The job market is one big reason why the higher gas prices aren't going to do any damage this summer compared to 2008," Zandi said. "What happened in summer 2008 was very shocking, surprising. We got to $4 for a gallon of gasoline very fast. Now we are used to it - $3.75 for a gallon of gasoline doesn't seem out of bounds. It's been hovering between $3.25 and $3.75 now for three years."
U.S. airlines will carry 3.1 million travelers this July Fourth, up 1 percent. Nearly 41,000 residents in the five-county Philadelphia area are expected to fly, down 0.6 percent from a year ago.
Holiday airfares have declined 5 percent, with the average round-trip on 40 U.S. routes costing $215, down from $228 last year, AAA said.
Hotel rates are up 9 percent, from $164 a night last July Fourth holiday to $178 this year, the auto club said. Weekend car-rental rates will average $58 a day, the same as a year ago.
"We expect this to be a strong holiday for us as the Fourth falls on a Friday and kicks off a three-day weekend," said Amtrak spokesman Craig Schulz. "We'll keep an eye on ticket sales and add capacity throughout the system as needed."
Amtrak will operate a late-night train - Train 1776 - departing Washington's Union Station at 11:05 p.m. Friday, after fireworks and July Fourth activities, bound for New York, with interim stops including Philadelphia's 30th Street Station.
A total of 41 million* people in the U.S. will be traveling this holiday week. In Pennsylvania and New Jersey, auto travel will be up and air travel will be down compared with the last July Fourth holiday.
in 2014 from 2013
By auto 1.46 million +1.9%
By Air 127,738 -0.6
By auto 1.1 million +1.9
By air 93,733 -0.6
By auto 34.8 million +2.2
By air 3.1 million +1.0
* Includes bus, train, and other travel modes.