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“New and Improved” Index indicates recovery Michigan retailers are the most optimistic
they have been in 17 months, following their best sales performance in
nearly two years, according to the January Michigan Retail Index. The Index of retailers’ sales expectations
for the next three months climbed to 70.3, the highest level of optimism
since August 2000. It stood at 69.5 in December and 62.8 in November.
Retailers’ rising expectations follow
January’s sales performance Index of 56.1, the highest level since
March 2000. It stood at 48.9 in December and 48.8 in November. The Michigan Retail Index is a joint project
of the Michigan Retailers Association and the Federal Reserve Bank of
Chicago and is based on a monthly survey of MRA members. For the first
time in the survey’s eight-year history, the results have been seasonally
adjusted to provide a better comparison of month-to-month retail data.
“January’s numbers show a strong
rebound from the sluggish performance of the past year and have raised
retailers’ expectations for continued year-to-year growth in the
next three months,” said Larry Meyer, MRA chairman and CEO. “We’re also pleased to announce
that like many of the products our members sell, the Michigan Retail Index
has become ‘new and improved’ by using seasonally adjusted numbers.
This enables us to eliminate seasonal fluctuations and more accurately
gauge how a month’s retail performance and expectations compare to
those of other months.” The new Index numbers, rather than expressing
the percent of members who reported an increase over the previous year,
represent a seasonally adjusted diffusion index. A diffusion index, which
is the sum of the percent of respondents indicating increase and half
the percent indicating no change, is calculated and then seasonally adjusted
using the U.S. Census Bureau’s widely used X-11 Seasonal Adjustment
procedure. Index values above 50 generally indicate
an increase in activity, while values below 50 indicate a decrease. Complete results of this month’s Michigan Retail Index - including data on sales, inventory, prices, promotions and hiring - are available at www.retailers.com/news/news.html. The website includes figures dating back to July 1994.
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Seasonally
adjusted diffusion index, calculated by adding the percent of respondents
indicating increased sales and half the percent indicating no change,
and then seasonally adjusting the result using the U.S. Census Bureau’s
X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate
an increase in activity, while values below 50 indicate a decrease.