For Immediate Release

August 23, 2006

LANSING —Michigan retailers’ sales and forecasts both slid to their lowest levels in three years in July.

Retailers’ sales performance dropped more than 5 points on July’s Michigan Retail Index, a survey project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago, and their forecasts for the next three months dropped nearly 4 points on the Index.

“Nationally, the summer heat drove many consumers back into stores to shop for summer clothes and merchandise. That didn’t appear to be the case in Michigan, where higher unemployment and other economic factors caused sales and optimism to wilt,” said MRA Chairman and CEO Larry Meyer.

“Although July is not a key month for retailers—it’s a time of clearing out summer merchandise to make room for fall—the trend remains a major concern,” Meyer added.

The Index found that 32 percent of retailers increased sales in July over the same month last year, while 55 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 38.8, down from 44.1 in June and 47.4 in May—and the lowest figure since February 2003. An Index number below 50 generally indicates decreased activity for the industry as a whole, and the performance number has been in negative territory for 20 of the past 22 months.

In addition, 46 percent believe their sales will increase for August–October, while 24 percent forecast declines and 30 percent project no change. The results create a seasonally adjusted outlook index of 60.2, down from 64.0 in June and 61.5 in May. It was the lowest figure since January 2003.

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.