Surprising February has retailers feeling more optimistic
LANSING — Michigan retailers boosted their three-month sales forecasts after posting improved sales in February, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
The survey found 92 percent project their sales will improve (68 percent) or be as good as (24 percent) the same period last year. That figure rose from 85 percent in January.
In addition, 66 percent of retail businesses reported February sales were better (44 percent) or as good as (22 percent) the same month a year ago. That rose from 54 percent.
“February’s performance ended a two-month decline and provided some positive momentum for the spring season,” said MRA President and CEO James P. Hallan. “Economic conditions — including the state unemployment rate dropping below 5 percent — remain strong and encourage consumers to make purchases more freely.”
Across the U.S., core retail sales rose 0.2 percent in February, according to the U.S. Commerce Department. But overall sales, which include autos and gasoline, dipped 0.1 percent and January’s 0.2 percent increase was revised to a 0.4 percent decrease.
The February Index survey found 44 percent of Michigan retailers increased sales over the same month last year, while 34 percent recorded declines and 22 percent reported no change. The results create a seasonally adjusted performance index of 58.7, up from 47.1 in January. A year ago in February the performance index stood at 41.7.
The 100-point index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve Bank of Chicago’s Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 68 percent of retailers expect sales during March-May to increase over the same period last year, while just 8 percent project a decrease and 24 percent see no change.
That puts the seasonally adjusted outlook index at 75.2, up from 70.5 in January. A year ago February, the outlook index stood at 78.5.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.