Unseasonably wintry weather kept customers out of Michigan stores in April, but luckily retailers were coming off a strong sales month in March, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago’s Detroit branch.
The Michigan Retail Index’s April survey found that 42 percent of respondents reported sales increases over March, 45 percent recorded declines and 13 percent reported no change. The results create a seasonally adjusted performance index of 43.7, well below the 64.3 performance index reported in March. A year ago, the Retail Index was 54.5.
The 100-point index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Easter falling on April 1 was a boost for March sales, but not April.
An April 15 ice storm caused widespread power outages and dangerous roads, and snow was still evident in much of Michigan as late as April 20. Coming off a cold March, retailers said winter-weary customers simply weren’t getting in the mood to buy spring clothing, equipment and other products. One survey respondent reported that the store lost a full day of sales due to a power outage.
“The unusual weather has certainly made the monthly numbers fluctuate this spring,” said James P. Hallan, President and CEO of Michigan Retailers. “But retailers say May has seen some bounceback, so we’re optimistic that retail sales and investment will pick up quickly.”
Indeed, the Retail Index shows that 75 percent of Michigan retailers expect strong sales through June, while 6 percent predict a decrease and 19 percent expect no change. That results in an adjusted outlook index to 76.5 – a positive sign for a fruitful spring, according to the Retail Index survey.
Nationally, sales and employment were on an upswing in April, according to the National Retail Federation. Year-over-year, April retail sales were up 2.8 percent and industry jobs increased by 48,900. The NRF largely attributes the positive growth to tax reform, higher savings levels and recent regulatory reform. Home furnishings and building materials/garden supply stores had strong months.
Michigan’s unemployment rate remained unchanged at 4.7 percent in April, according to the Michigan Department of Technology, Management & Budget. The rate was eight-tenths of a percentage point above the national rate of 3.9 percent and three-tenths of a percentage point higher than the April 2017 rate of 4.4 percent.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.