State’s retail sales get a late summer boost
Michigan retailers reported a slight uptick in sales activity for August over a month ago, and they’re optimistic the next three months will be better, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Just over half — 54 percent — of retailers posted sales increases in August, and 66 percent expect the sales activity to increase for the next three months.
“Back-to-school sales are likely responsible for the increase,” MRA President and CEO James P. Hallan said. The National Retail Federation predicted a banner year for sales of student clothing and supplies.
The Michigan economy remains steady. Unemployment increased by two-tenths of a percentage point to 3.9 percent, heading up for the first time since February. But it remains below the national average of 4.4 percent and a full percentage point lower than August 2016. The rate also reflects fewer people in the state’s labor market actively seeking employment.
The Michigan Retail Index’s August survey found that while 54 percent reported sales increases over July, 33 percent recorded declines and 13 percent reported no change. The results create a seasonally adjusted performance index of 66.5, a healthy leap from 44.5 in July.
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.
While 66 percent of Michigan retailers expect sales during September-November to increase, 13 percent predict a decrease and 21 percent expect no change. That puts the seasonally adjusted outlook index at 76.6, according to the Retail Index survey, revealing retailers’ optimism for Halloween and holiday sales.
An annual survey showed Americans will splurge to the tune of $9.1 billion on Halloween costumes, candy and pumpkins this fall. That’s up 8.3 percent from last year’s $8.4-billion mark, according to the survey by the National Retail Federation and Prosper Insights & Analytics.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.