LANSING, MI--(Marketwire - June 23, 2010) - Rebounding retail sales hit a snag in May as Michigan's retail industry posted sharply lower numbers, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.
May's performance was the weakest since November and broke a string of three consecutive months above 50 on the 100-point Index.
The drop coincided with an unexpected retrenchment by consumers across the nation. Excluding autos, U.S. retail sales fell by 1.1 percent, the largest month-to-month decline in 14 months, according to the U.S. Commerce Department. Analysts had predicted a small gain.
"We expected to see continued improvement here, because the state's unemployment rate dropped in May and because retailers were up against some weak sales numbers from a year ago," said MRA President and CEO James P. Hallan.
"But it appears that national economic issues, including a sharp drop in home sales, were a major drag against consumer spending."
The Michigan Retail Index survey for May found that 39 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 42.4, down from 57.9 in April.
Index values below 50 generally indicate a decrease in overall retail activity.
Looking ahead, 49 percent of retailers expect sales during June-August to improve over the same period last year, while 20 percent project a decrease and 31 percent no change. That puts the seasonally adjusted outlook index at 62.3, down from 74.3 in April.
Northern Michigan retailers fared the best, with 52 percent reporting increased year-to-year sales.
Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.
Michigan Retail Index
May 2010 results
Index figures dating to July 1994 are available at www.retailers.com/news/retailindex.html
May Performance
Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago
(numbers in parentheses indicate April results)
| % Increased | % Decreased | % No Change | Index* | Responses | |
| Sales | 39 (52) | 45 (32) | 16 (16) | 42.4 (57.9) | 106 (120) |
| Inventory | 35 (25) | 26 (24) | 39 (51) | 52.1 (48.8) | 104 (118) |
| Prices | 28 (15) | 11 (8) | 61 (77) | 59.5 (52.5) | 104 (119) |
| Promotions | 32 (32) | 4 (5) | 64 (63) | 64.0 (61.0) | 104 (117) |
| Hiring | 12 (14) | 15 (8) | 73 (78) | 45.3 (52.4) | 101 (118) |
Outlook for Next 3 Months
Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago
(numbers in parentheses indicate April results)
| % Increased | % Decreased | % No Change | Index* | Responses | |
| Sales | 49 (60) | 20 (12) | 31 (28) | 62.3 (74.3) | 106 (119) |
| Inventory | 37 (37) | 17 (18) | 46 (45) | 55.0 (57.9) | 104 (118) |
| Prices | 25 (16) | 5 (6) | 70 (78) | 60.2 (55.6) | 104 (118) |
| Promotions | 38 (37) | 7 (4) | 55 (59) | 67.4 (67.7) | 104 (118) |
| Hiring | 11 (20) | 10 (4) | 79 (76) | 49.4 (56.6) | 104 (117) |
May Sales Performance & Outlook for Next 3 Months, by Region
(the first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months)
| % Increased | % Decreased | % No Change | |
| North | 52 (57) | 39 (26) | 9 (17) |
| West | 31 (48) | 55 (28) | 14 (24) |
| Central | 50 (37) | 37 (19) | 13 (44) |
| East | 28 (29) | 43 (14) | 29 (57) |
| Southeast | 36 (60) | 44 (12) | 20 (28) |
Question of the Month
How would you characterize your plans for seasonal hiring this summer compared to last summer?
| Less | Same | More | |
| 20% | 78% | 2% |
*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.
Contact Information:
Contact:
Tom Scott
517.372.5656