For Immediate Release

September 27, 2006

LANSING —Michigan retailers’ sales and short-term forecasts remained down in August.

Retailers’ sales performance fell slightly on August’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 3 points on the Index.

“Back-to-school shopping provided no positive momentum for most Michigan retailers, which was disappointing,” said MRA Chairman and CEO Larry Meyer. “We will be watching September’s numbers closely to see if the recent drop in gasoline prices spurs consumer spending during the fall.”

The Index found that 31 percent of retailers increased sales in August over the same month last year, while 56 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 37.3, down from 38.8 in July and 44.1 in June—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 below 50 for 21 of the past 23 months.

In addition, 46 percent believe their sales will increase for September–November, while 28 percent forecast declines and 26 percent project no change. The results create a seasonally adjusted outlook index of 57.0, down from 60.2 in July and 64.0 in June. It was the lowest figure since December 2000.

No region of the state posted positive results in August. Among the types of retailers tracked by the Index, only furniture/appliance retailers had a majority of stores (56 percent) reporting increases.

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.