LANSING — Michigan retailers’ forecasts for spring sales slipped, following a drop in their February sales, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
February’s sales index number dropped below 50 for the second time in three months, showing that consumers were still adjusting to higher payroll taxes, continued high unemployment and rising gasoline prices.
“February’s fall-off in sales puts Michigan’s retail industry back on a bumpy road,” said MRA President and CEO James P. Hallan. “January gave us a solid jump from a disappointing December, but February returned to December’s level.”
Most retailers maintained a positive projection for spring sales, but the industry’s overall short-term outlook took a hit in February, falling more than seven points on the index.
The February Michigan Retail Index found that 37 percent of retailers increased sales over the same month last year, while 43 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 46.8, down from 57.9 in January and the lowest February since 2009. A year ago February it was 59.3.
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 higher than 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 59 percent of retailers expect sales during March through May to increase over the same period last year, while 8 percent project a decrease and 33 percent no change. That puts the seasonally adjusted outlook index at 67.3, down from 74.7 in January. A year ago February it stood at 67.9.
The U.S. Commerce Department reported that national sales in February increased 1.1 percent, but just 0.7 percent when excluding autos, gas stations and restaurants.
William Strauss is a senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151