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Michigan retail sales suffer through chilly spring
LANSING — Michigan’s endless winter has chilled retail sales. Overall retail sales activity declined in both March and February, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Although most retailers expect sales to improve in the second quarter, their level of optimism also declined during March.
“We all need and are looking forward to warm, spring weather,” said James P. Hallan, MRA president and CEO.
“Retail sales were lackluster in March despite a 0.3 percent drop in the state’s unemployment rate and falling gasoline prices, two factors that usually push up sales. The weather and the higher federal payroll tax were strong, cold headwinds.”
March retail sales declined nationally, as well, falling by the most in nine months, according to the U.S. Commerce Department.
The March Michigan Retail Index found that 38 percent of retailers increased sales over the same month last year, while 35 percent recorded declines and 27 percent saw no change. The results create a seasonally adjusted performance index of 47.8, up slightly from 46.8 in February but below the important 50 mark. A year ago March, it was 57.8.
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, 56 percent of retailers expect sales during April to June to increase over the same period last year, while 12 percent project a decrease and 32 percent no change. That puts the seasonally adjusted outlook index at 66.8, down from 67.3 in February. A year ago March it stood at 69.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.