Article courtesy of MIRS for SBAM’s Lansing Watchdog newsletter
Michigan’s unemployment rate edged down in July, retailers reported relatively strong summer sales and consumers grew markedly more pessimistic about the economy, according to three separate reports released this week.
The state’s seasonally adjusted unemployment rate dropped from 5% to 4.9%, although the decline came as Michigan’s labor force shrank by 29,000 people. Employment declined by 23,000 and the number of unemployed people fell by 6,000.
The national unemployment rate fell to 4.1 percent.
Michigan retailers reported generally positive July sales but are considerably less optimistic about the next three months, while the University of Michigan’s preliminary August consumer sentiment reading dropped about 8%.
The first report came from the Department of Technology, Management and Budget, which showed payroll jobs up 7,000 in Jully, with manufacturing leading the gainers with 4,000. The leisure and hospitality, construction, and private education and health services sectors each saw a 2,000 job increase.
The largest job loss came from the professional and business services sector, which each lost 3,000 jobs in the month.
More people also walked away from work in the state, with the labor force participation rate going down to 59.1% in July.
The Michigan Retailers Association’s July Retail Index slipped from 58.8 in June to 57.5, but remained well above the 49.8 recorded a year earlier. Fifty-six percent of surveyed retailers reported higher sales, compared with 31% reporting declines and 13% reporting no change.
The industry’s outlook was notably less upbeat. The three-month outlook index dropped 10 points to 63.5, its lowest level since June 2025.
“Sales, promotions, hiring, and inventory are all on the rise,” Michigan Retailers Association President William Hallan said.
Fifty-six percent of retailers in the survey said sales had increased, 31% who said they had decreased, while 13% stayed the same.
Retailers were also preparing for back-to-school shopping in July and getting set for the holiday shopping season.
The projections for the next three months were the lowest since June 2025, with 54% of retailers believing sales will get better, 26% believe it will be worse and 20% who believe it won’t change.
The outlook index dropped 10 points to 63.5.
“Between the conflict with Iran, high fuel prices, and new tariff uncertainty, retailers’ optimism remains positive but is weakened. Tourism and back-to-school shopping have helped our retailers have a positive summer season, but fall remains filled with unknowns,” Hallan said.
Consumer confidence moved in the opposite direction. The University of Michigan’s preliminary August Surveys of Consumers reading fell about 8% from July, with expectations for short-term business conditions dropping 11% and long-term expectations falling 17%.
July had also fallen, but preliminary results from the nation show current economic conditions are driving the falling consumer sentiment. The final report will be released Aug. 28.
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