For Immediate Release

December 27, 2006

LANSING — Despite a stronger start to the holiday shopping season, Michigan retailers appear less optimistic about the start of the new year, according to the latest Michigan Retail Index survey by the Michigan Retailers Association and Federal Reserve Bank of Chicago.

The sales performance component of the November index jumped nearly five points from last year and more than six points over October, indicating a solid beginning for holiday sales. But retailers’ sales outlook for the next three months dropped nearly seven points from a month earlier and more than 11 points from a year ago.

December’s Michigan Retail Index reporting sales for the entire holiday season will be available January 24. Retailers went into this season projecting, on average, a 4.5-pecent gain.

“It’s a long season, with many twists and turns, and it runs to the end of the year. But now we have data confirming it started well,” said MRA Chairman and CEO Larry Meyer.

“It’s also not surprising that retailers are tempering their outlook for the start of the new year, given economists’ predictions that Michigan’s economy won’t improve in the immediate future.”

The Index showed that 41 percent of retailers increased sales in November over the same month last year, while 43 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 50.4, up from 44.2 in October.

In addition, 41 percent believe their sales will increase for December–February, while 34 percent forecast declines and 25 percent project no change. The results create a seasonally adjusted outlook index of 62.4, down from 69.3 in October.

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.