For Immediate Release

July 26, 2006

LANSING — Michigan retailers are a little more optimistic about the final weeks of summer despite a slow start to
the season.

Retailers' outlook for the next three months gained 2.5 points on June's Michigan Retail Index, a survey project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago. Meanwhile, June's sales performance dropped 3.3 points on the Index -- remaining in negative territory for 19 of the past 21 months.

"In June we saw a reversal of May. As we moved into summer and closer to the back-to-school shopping season, optimism rebounded but sales fell off," said MRA Chairman and CEO Larry Meyer. "Retailing continues to
struggle in Michigan's tough economy."

The Index found that 40 percent of retailers increased sales in June over the same month last year while 41 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 44.1, down from 47.4 in May. An Index number below 50 generally indicates decreased activity for the industry as a whole.

In addition, 53 percent believe their sales will increase for July- September, while 21 percent forecast declines and 26 percent project no change. The results create a seasonally adjusted outlook index of 64.0, up from 61.5 in May and essentially the same as April and March levels.

West Michigan retailers fared the best during June, with 50 percent reporting sales gains and 31 percent posting declines.

Jewelers enjoyed some of the best numbers, with 52 percent posting better results and 22 percent experiencing declines.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.