Spring surge boosts summer confidence for retailers
Michigan retailers posted their strongest performance of the year in May, pushing up sales by 12 points on the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Nearly two-thirds (64 percent) of retailers in the state posted year-over-year sales increases during the month, boosting the 100-point sales performance index to 66.5.
A similar percentage (63 percent) expects gains to continue through August, although the separate outlook index fell 2.7 points to 71.6.
“Our index has been in positive territory for four consecutive months and jumped in May to its highest level in two years,” MRA President and CEO James P. Hallan said.
“Michigan’s economy continues moving in a positive direction, with May unemployment falling by half a percentage point to 4.2 and dropping below the national rate of 4.3 percent.”
The Michigan Retail Index survey for May found 64 percent of the state’s retailers increased sales over the same month last year, while 26 percent recorded declines and 10 percent reported no change. The results create a seasonally adjusted performance index of 66.5, up from 54.5 in April.
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, 63 percent of Michigan retailers expect sales during June-August to increase over the same period last year, while 11 percent project a decrease and 26 percent no change. That puts the seasonally adjusted outlook index at 71.6, down from 74.3 in April but well above the 50 level.
Nationally, retail sales excluding autos and gasoline were flat in May, according to the U.S. Commerce Department.
The Michigan Senate Fiscal Agency reported May’s year-over-year state sales tax revenues, not including autos, rose 9.8 percent to $557 million.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.