The frigid temperatures and continuous snow storms across the state slowed retail sales in February, according to the monthly Retail Index survey that Michigan Retailers Association (MRA) conducts in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
The cold and snow at the beginning of the year continued through February putting the seasonally adjusted performance index at 42.8, a slight increase from February 2018’s 42.2. January 2019’s seasonally adjusted performance came in at 42.1.
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 February survey showed that 32 percent of respondents reported sales increases over January. Fifty-three percent of retailers recorded declines in February and 15 percent reported no change.
“January was a tough month with harsh weather. February, unfortunately, continued the trend. Retailers are eager spring will bring sunshine and an increase in foot traffic,” said James P. Hallan, MRA President and CEO.
The Retail Index shows that 66 percent of Michigan retailers expect strong sales through May, while 14 percent predict a decrease; 20 percent expect no change. That results in an adjusted outlook index of 66.6 – a strong prediction for the upcoming months leading into summer.
“Retailers remain hopeful and ready,” said Hallan. “Consumers will start to venture out once warm weather and sunshine become more constant.”
The National Retail Federation recently released the holiday forecast for Easter spending. Eight in 10 people plan to celebrate Easter and average spending on clothing, cards, candy and flowers is estimated at $151 per person.
According to the National Retail Federation, retail jobs decreased by 6,100 jobs, but the average hourly earnings rose 11 cents over January to $27.66.
The unemployment rate in Michigan remained at 4.0 percent in February 2019, while the national rate dropped to 3.8 percent from January’s 4.0 rate.
The state Senate Fiscal Agency showed that February 2019 sales tax receipts rose 1.5 percent over February 2018’s $484.8 million, but were $27.6 million below the forecasted level.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.