Economy Watch: Retailers Likely Had Strong Holiday Season

While the data is still being complied, increases in consumer confidence and personal incomes are positive indications that retail sales were up this holiday season.
Source: University of Michigan Survey of Consumers, December 2017
Source: University of Michigan Survey of Consumers, December 2017

Did retailers enjoy a big boost in sales this holiday season? Preliminary indications are that they did, but the data is still being compiled. Income is up for consumers, which would seem to bode well for retail sales, even for brick-and-mortar stores. Then again, consumer confidence dropped a bit in December, though not that much.

According to the University of Michigan, its index of consumer confidence experienced a minor decline in December, with the December figure just below the average for 2017 (95.9 versus 96.8). In fact, the average for all of 2017 was the highest since 2000, and only during the long expansions of the 1960s and ’90s was confidence significantly higher.

Positive signs

Consumers also have a bit more money to spend. Real disposable personal income increased 0.1 percent in November, according to the Bureau of Economic Analysis, and real personal consumption expenditures increased 0.4 percent. Those increases came in spite of the lingering impact of the hurricanes that hit the United States this year.

With more money to spend and more optimism, retail organizations have been predicting a strong holiday sales season. Moreover, while online sales will do well, so will other categories of retailers.

Ahead of the holidays, the National Retail Federation did a survey of shoppers that had yet to buy presents as of Dec. 12, which the organization termed “last-minute shoppers.”

Of that group, some 51 percent planned to buy gifts online. The percentages for other retail segments were: department stores (41 percent), discount stores (26 percent), clothing or accessories stores (21 percent), electronics stores (18 percent), local/small businesses (14 percent) and grocery/supermarket stores (14 percent). The total is more than 100 percent because shoppers tend to shop at more than one retail segment.