"Michigan retailers are expecting improved sales this year, with much of the growth coming after the First Quarter," said James P. Hallan, MRA president and CEO. "They're projecting better sales as a result of the federal economic stimulus package and some overall economic improvement."

For January, the Index showed 37 percent of retailers increased sales over the same month last year, while 46 percent recorded declines and 17 percent saw no change. The results create a seasonally adjusted performance index of 47.5, up from 38.5 in December. A year ago January, the Index was at 50.4.

In addition, 42 percent believe their sales will increase for February-April, while 34 percent forecast declines and 24 percent project no change. The results create a seasonally adjusted outlook index of 53.4, down from 55.5 in December.

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
January 2008 results
Index figures dating to July 1994 are available at www.retailers.com/news/retailindex.html

January 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 December results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales           37 (30)    46 (54)      17 (14)      47.5 (38.5)  116 (120)
Inventory     20 (28)    36 (35)      44 (32)      49.0 (55.3)  116 (117)
Prices          44 (45)       9 ( 8)      47 (43)      67.4 (66.6)  116 (118)
Promotions  29 (38)       7 ( 6)      64 (51)      64.8 (61.7)  115 (117)
Hiring           2 ( 6)      26 (15)      72 (68)      38.4 (40.2)  116 (109)

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 December results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales           42 (36)    34 (36)      24 (23)      53.4 (55.5)  116 (117)
Inventory     27 (22)    36 (41)      37 (30)      43.0 (42.3)  115 (114)
Prices          38 (45)       6 ( 9)      56 (38)      67.4 (65.9)  116 (113)
Promotions  46 (33)       5 ( 9)      49 (51)      68.8 (63.7)  115 (114)
Hiring           4 ( 5)      19 (15)      77 (70)      41.5 (44.5)  116 (111)

January 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          26 (22)      48 (52)      26 (26)
West          43 (33)      57 (48)        0 (19)
Central       33 (67)      28 (11)      39 (22)
East           42 (50)      16 (17)      42 (33)
Southeast   44 (49)      54 (28)       2 (23)

Question of the Month
What do expect your sales growth to be in 2008?

Average 3.3%

*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.