Lansing, MI - While most Michigan retailers say they have seen little boost in sales from the federal economic stimulus checks, slightly more rang up better sales in May and are projecting better summer sales, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

"There is some positive news in the May numbers, but it's still extremely tough out there for all retailers," said James P. Hallan, MRA president and CEO. "The disappointing finding is that most retailers say the economic stimulus checks aren't boosting sales. It appears that most of those checks are being spent on higher priced gasoline and food and, perhaps, paying down debt."

For May, the Index showed 38 percent of retailers increased sales over the same month last year, while 45 percent recorded declines and 17 percent saw no change. The results create a seasonally adjusted performance index of 43.4, up from 43.3 in April and the highest since January.

Looking forward, 40 percent believe their sales will increase for June-August, while 30 percent forecast declines and 30 percent project no change. The results create a seasonally adjusted outlook index of 53.0, up from 49.0 in April.

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 Retail Index

May 2008 results
Index figures dating to July 1994 are available at http://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           38 (36)      45 (45)           17 (19)       43.4 (43.3)    132 (108)
Inventory     28 (35)      34 (37)           38 (28)       43.7 (46.4)    130 (107)
Prices          45 (55)         9  (5)           46 (40)       68.9 (73.8)    131 (107)
Promotions   30 (37)        8  (9)           62 (54)       62.0 (62.0)    131 (105)
Hiring           10  (7)      17 (19)           73 (74)       44.8 (44.3)    131 (106)

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          40 (39)      30 (37)         30 (24)          53.0 (49.0)    131 (108)
Inventory    25 (21)      32 (37)         43 (42)          45.6 (40.1)    130 (107)
Prices         49 (46)       6  (4)           45 (50)          74.3 (71.8)    131 (107)
Promotions 31 (38)        4  (4)          65 (58)          65.6 (69.5)    130 (106)
Hiring           7  (8)      13 (12)          80 (80)          46.3 (46.6)    130 (105)

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           44 (41)      37 (28)      19 (31)
West           28 (44)      64 (28)       8 (28)
Central        46 (38)      29 (37)      25 (25)
East            50 (25)      33 (25)      17 (50)
Southeast    31 (42)      51 (32)      18 (26)

Question of the Month
Are you noticing any sales improvement from the federal stimulus checks?

Yes, a lot    Yes, a little       No          Don't know
1.5%            14.5%          65.7%        18.3%

*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.