Jul 25 - Michigan retailers forecast bright summer
LANSING – Michigan retailers look forward to stronger sales the rest of the summer after a dip to start the season, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.
The Index’s future outlook component rose to its highest level in nine years during June, climbing to 79.3 on the 100-point scale.
“Retail sales continue their roller-coaster inconsistency from month to month, although optimism remains high,” said James P. Hallan, MRA president and CEO. “This year we’re seeing weak months follow solid ones, and vice versa.”
He noted that Michigan’s unemployment rate increased to 8.7 percent from 8.4 percent in June. Gasoline prices fluctuated wildly because of refinery issues, jumping to the highest in the nation at mid-month before tumbling back to more “normal” levels.
The June Michigan Retail Index found that 34 percent of retailers increased sales over the same month last year, while 40 percent recorded declines and 26 percent saw no change. The results create a seasonally adjusted performance index of 47.7, down from 54.9 in May. A year ago June it was 58.6.
The Index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 63 percent of retailers expect sales during July–September to increase over the same period last year, while 8 percent project a decrease and 29 percent no change. That puts the seasonally adjusted outlook index at 79.3, up from 76.6 in May and the highest since 80.4 in November 2004. A year ago June it stood at 71.9.
At the national level, June retail sales excluding autos, gasoline and building materials also softened, increasing 0.15 percent from May, the weakest since January, according to the U.S. Commerce Department.
Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.