By Evan Clark and Arthur Friedman
with contributions from Debra Borchardt
 on December 23, 2015

Consumers are feeling better, but they don’t seem to be going into stores with enough shopping spirit to save Christmas from mediocre gains.

The University of Michigan Consumer Sentiment Index rose 1.3 points for December to 92.6. The final headline reading increased 0.8 points from the midmonth reading, implying that consumers were slightly more optimistic in the final stretches of the holiday shopping season.

But that didn’t seem to help stores last weekend, although expectations for sales right after Christmas are still growing.

In-store metric provider RetailNext said traffic at retail fell 10.4 percent this past weekend compared with a year earlier, with net sales down 6.7 percent.

Traffic from Nov. 1 through Dec. 14 was down 8.1 percent according to RetailNext. E-commerce players have been picking up that slack with swift gains, but it won’t be possible to get a clear read on the whole season until after New Year’s.

Less dire was the reading from Foursquare. The app, which people use to check in and rate places, found that store traffic on “Super Saturday” was down 1 percent from a year ago, but still about 3 percent ahead of the Black Friday footfall.

Foursquare also found that shopping visits are up about 5 percent for the entire season. While store visits are down from last year for Black Friday and Super Saturday, retailers did see a lift over the in-between weekends.

The Retail Economist-Goldman, Sachs & Co. Weekly Chain Store Sales Index offered some more reason to hope. Sales for the week ended Saturday showed a gain of 3 percent from a year earlier, according to the index.

Although fashion retailers are struggling to end a tough year on a strong note, consumers say they’re feeling better.

Respondents for the University of Michigan consumer survey were more bullish about their current economic circumstances, pushing that part of the index up 3.8 points to 108.1, while expectations fell 0.2 points to 82.7.

Consumer sentiment rose for the third month in a row to reach the highest level since July, said Chris G. Christopher Jr., director of consumer economics for IHS Global Insight.

“One of the bright spots of the U.S. economy has been consumer spending,” said Christopher, pointing to U.S. Commerce Department reports on durable and non-durable goods. “The economic fundamentals are in place for relatively strong 2016 consumer spending outlook. Several positives such as lower gasoline prices, modest consumer price inflation, and increasing consumer confidence are assisting many lower- and middle-income households in spending a little more freely.”

Real consumer spending, excluding food and energy, has been running at a 0.2 percent monthly increase since August, he noted, adding, “This is a uniform and relatively strong increase.”

Consumer spending reached a relatively healthy pace in November after a weak start to the calendar fourth quarter. Real consumer spending on durable and non-durable items accelerated in November, while real spending on services has been flat for the second month in a row, Christopher said.

“Prices of durables and non-durables fell, while consumer service prices have been in positive territory since April 2009,” he said. “The stronger dollar, lower energy prices, and the retail inventory accumulation in the third quarter are having a profound impact on consumer durable and non-durable prices in the fourth quarter.”

IHS projected that holiday retail sales will rise 3.4 percent above a year earlier, not as strong as last year’s 4.1 percent gain, but significantly stronger than the 2.7 percent increases in 2013 and 2012. This year’s holiday retail sales are expected to be close to $630 billion.

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