Retail sales have had ups and downs this year, but August helped make up for the slow periods.
The August Retail Index survey came in at 60.1, a decrease from August 2018’s 73.2, but a jump from July 2019’s 54.7. The seasonally adjusted performance index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
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.
The August survey showed that 50% of respondents reported sales increases over July. Twenty-seven percent of retailers recorded declines and 23% reported no change.
The Retail Index shows that 54% of Michigan retailers expect increased sales through November, while 22% predict a decrease; 24% expect no change. That results in an adjusted outlook index of 65.8 – a strong sign as businesses edge toward the holidays.
“August continued the bounce back from the slow spring sales. With high schools starting classes earlier, it forced parents to shop earlier,” said William J. Hallan, MRA President and CEO. “As store owners prepare their inventory and work force for the holidays, we hope to see another increase in sales.”
Halloween is a retail force as well. The National Retail Federation predicts the average shopper will spend $86.27, comparable to last year’s record $86.79. That totals $8.8 billion in Halloween spending. Costume spending is expected to account for $3.2 billion, the NRF survey shows.
The unemployment rate in Michigan dropped one tick to 4.2% in August 2019, while the national rate remained at 3.7%. In August 2018, Michigan’s unemployment rate was 3.9 percent.
According to the state Senate Fiscal Agency, August 2019 sales tax receipts increased 2.8% over August 2018. Sales tax receipts were $6.7 million above the forecasted amount.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.