Help feds shape economic policy

by Larry Meyer
MRA Chairman and CEO

Most people see themselves as consumers of news, not as newsmakers. And they certainly don’t see themselves influencing U.S. economic policy.

As a member of Michigan Retailers Association, however, you have a unique opportunity each month to participate in a project that makes news and helps shape federal economic policy.

I’m talking about the Michigan Retail Survey card you receive from the Federal Reserve Bank in Chicago. Why Chicago? Because the Detroit branch falls within the Federal Reserve’s Chicago region.

When you take a minute to fill out the card and drop it in the mail, all of us benefit from your input. The responses on these cards are collected, analyzed, seasonally adjusted and turned into the Michigan Retail Index, a unique and valuable tool for assessing Michigan’s retail climate.

The summary of numbers we report on the Michigan Retailer’s “How’s Business” page each month also goes out as a news release to Michigan media and national business news services. As a picture of an important sector of the state’s economy—and the only statewide survey of its kind—it is of interest not only to Michigan retailers but also to economists, policymakers and business leaders at the state and national level.

According to William Strauss, senior economist and economic advisor at the Chicago Federal Reserve, it occasionally “has leading economic indicator properties.” That means it’s considered helpful in giving the Federal Reserve guidance on where the retail market is proceeding.

“The Michigan Retail Index is presented every time we meet with the president to discuss what should be done with monetary policy, eight times a year, as a tool for understanding consumer behavior. After all, consumer spending represent two-thirds of the economy,” Strauss explained.

If you have ever wondered whether those numbers really reflect your situation, well, it’s all a matter of participation. Like any statistical index, the quality of the data in Michigan Retail Index depends on participation.

On average, 5 percent of you fill out and mail in your cards. Our current levels of participation produce statistically valid results, but higher participation would bring the “picture,” as I have called it, into better focus. Higher participation would especially improve the quality when the numbers are broken down by region and retail category, information that appears only in the full report each month.
The numbers provided in “How’s Business” are a summary of the data. The full report can help you benchmark your sales and productivity to your competitors while maintaining confidentiality.

To those of you who send in your card each month, thank you for your contribution to developing this important benchmark of retail activity.

To those of you who haven’t participated yet: find a minute this month (and every month) to fill out the card. It’s quick and easy, and when you drop it in the mail, you will know you’re helping to shape the economic news of your state and your nation.