LANSING, Mich. – Michigan retailers reported a decrease in November sales over October, but remain optimistic as shoppers use the final days before Christmas to buy holiday gifts.
The November Retail Index survey came in at 46.3, down from October’s 52.4. Thirty-nine percent of Michigan retailers reported an increase in sales over October, 51% reported a sales decline; and 10% reported no change. The seasonally adjusted performance index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
The 100-point index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Thirty-nine percent of retailers predict their sales will continue to rise through February, but 45% said they expect a sales decline, and 16% don’t think things will change. That results in a 57.4 Index rating.
“With Congress passing the recent stimulus package, we hope to see consumers use this money in their local downtowns and communities. The CARES Act certainly helped generate retail activity in the spring and we’re hopeful this next round of stimulus will do the same,” said Bill Hallan, President and CEO of Michigan Retailers Association.
“With only a few days left to shop for last-minute Christmas gifts, we urge shoppers to buy gifts local and keep their money in Michigan. Michigan retailers are ready to serve you.”
According to the National Retail Federation, U.S. consumers are estimated to have spent a total of 186.4 million on holiday gifts over Thanksgiving weekend, compared to 189.6 million in 2019. Seventy-two percent of consumers that made purchases over the weekend, purchased holiday gifts.
The NRF defines the holiday season as Nov. 1 through Dec. 31 and forecasts that sales will increase between 3.6 percent and 5.2 percent over 2019 to a total between $755.3 billion and $766.7 billion. Over the 2020 holiday season, NRF expects that online and other non-store sales, which are included in the total, will increase between 20% and 30%. In total, consumers plan to spend $997.79 on gifts, holiday items and additional “non-gift” purchases for themselves and their families this year.
At $594.4 million, Michigan sales tax receipts in November 2020 decreased 13.5% over November 2019.
Michigan’s unemployment rate preliminarily came in at 6.9%, a slight uptick from October’s 6.1%. Last year, Michigan’s unemployment rate was 3.9%. In November 2020, the national unemployment rate dropped to 6.7% compared to October’s 6.9%.
Note: Paul Traub with the Federal Reserve Bank of Chicago, can be reached at 313.964.6297.