Michigan Retailers' Sales and Forecasts Jump

LANSING, MI--(Marketwire - June 27, 2007) - Michigan retailers' sales and forecasts jumped to their highest levels of the year in May, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The solid upturn was a sharp contrast to April's dismal figures.

"Warmer weather and consumers rebounding from their April pullback sparked retailers' sales and optimism," said Larry Meyer, MRA chairman and CEO.

"Those factors plus a drop in Michigan's unemployment rate offset a continued rise in gasoline prices."

The Michigan Retail Index showed that 47 percent of retailers increased sales in May over the same month last year, while 32 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 54.1, up from 39.7 in April and the highest since January 2006. It was also the best May since 2000.

Index values above 50 generally indicate an increase in activity for the overall industry, while values below 50 indicate a decrease.

In addition, 46 percent believe their sales will increase for June-August, while 22 percent forecast declines and 30 percent project no change. The results create a seasonally adjusted outlook index of 59.1, up from 49.8 in April and the highest since December 2006.

Northern Michigan retailers led the state, with 56 percent boosting sales and 24 percent falling behind last year. Southeast Michigan retailers followed, with 52 percent reporting increases and 30 percent decreases.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retailers Association/Federal Reserve Bank of Chicago

Michigan Retail Index
May 2007 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       47 (35)       32 (47)      19 (13)      54.1 (39.7)  139 (145)
Inventory   27 (27)       30 (24)      39 (39)      46.5 (43.2)  136 (137)
Prices      37 (32)        6  (8)      52 (52)      64.4 (56.8)  135 (141)
Promotions  35 (37)       10  (8)      50 (49)      61.8 (60.4)  135 (143)
Hiring      11  (9)        8 (12)      74 (67)      46.6 (41.7)  132 (134)


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       46 (38)       22 (27)      30 (29)      59.1 (49.8)  139 (143)
Inventory   28 (22)       27 (33)      41 (37)      48.9 (38.0)  136 (140)
Prices      36 (30)        5 (10)      54 (51)      65.6 (55.3)  135 (139)
Promotions  45 (29)        3  (4)      47 (57)      70.9 (59.6)  135 (138)
Hiring       5 (11)        7  (9)      81 (66)      46.2 (42.5)  132 (131)


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       56 (48)       24 (28)      20 (24)
West        41 (52)       48 (26)      11 (22)
Central     41 (34)       28 (14)      31 (52)
East        17 (33)       33 (33)      50 (34)
Southeast   52 (52)       30 (19)      15 (26)

*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