Retail sales and forecasts slip for second consecutive month
LANSING — Fewer Michigan retailers increased sales and forecasts in July for the second consecutive month, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
“The performance of Michigan’s overall retail industry slipped from June to July, chiefly because more retailers reported flat sales in July,” said MRA President and CEO James P. Hallan.
“The broader picture, however, remains one of year-to-year growth.”
Michigan’s unemployment rate has risen the past three months, from 8.3 in April to 9.0 in July, contributing to the falloff in retail sales performance the past two months, Hallan said.
“As we’ve said all along, we must see sustained improvement in our state’s jobs picture before we’ll see significant and sustained improvement in retail sales,” he said.
The July Michigan Retail Index found that 43 percent of retailers increased sales over the same month last year, while 32 percent recorded declines and 25 percent saw no change. The results create a seasonally adjusted performance index of 56.1, down from 58.6 in June and 61.9 in May. A year ago July, it was 53.6.
The Index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 42 percent of retailers expect sales during August-October to increase over the same period last year, while 14 percent project a decrease and 44 percent no change. That puts the seasonally adjusted outlook index at 67.4, down from 71.9 in June and 77.5 in May. A year ago July, it was 74.5.
Northern Michigan retailers led the state in July with 58 percent of the regional group reporting sales increases over July 2011.
Gifts stores and apparel stores throughout the state rang up the best numbers among the various trade lines.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.