Retail Index down over 20 points
Michigan Retailers Association reports that February 2025’s Retail Index decreased to 41.5, a steep decline compared to January’s 62.2 on the 100-point Retail Index. This marks the first month with an index rating below 50.0 since September 2024, ending a four-month stretch of strong index scores.
The 100-point Index provides a snapshot of the state’s overall retail industry. Index values above 50 generally indicate positive activity, with higher numbers indicating stronger activity. The seasonally-adjusted performance Index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
The seasonally-adjusted Index reflects how retail sales compare to an average February. Just thirty-eight percent of retailers noted an increase in February sales over January, while 53% of Michigan retailers surveyed reported a sales decrease, and 9% reported no change.
“While January’s index score was the highest we’d seen in over a year, February’s Retail Index sounds the alarm that Michigan’s retailers are deeply feeling the impacts of the current economic uncertainty that our country is facing,” said William J. Hallan, President and CEO of the Michigan Retailers Association. “The instability surrounding tariffs on Canada, Mexico, and China is creating an increasingly difficult environment to run a business.”
Many retailers surveyed reported concerns about the volatility and inconsistency in tariffs, their short- and long-term impacts, and having to increase prices for consumers due to significant increases in the cost of goods and materials impacted by tariffs.
3-Month Outlook Remains Strong
When asked to predict their sales outlook for March through May, 75% of retailers predicted their sales will continue to rise, 12% said they expect their sales to decline, and 13% anticipate no change. That results in an Index rating of 68.1, an increase from January’s three-month prediction of 66.4, and a continued strong indication for positive sales trends into the second quarter of 2025.
“If there’s one thing we know about Michigan’s retailers, it’s that their optimism never ceases to impress,” Hallan shared. “Even with the current instability in the market, we continue to see consistency in the 3-month outlook. Retailers are leaning into their entrepreneurial grit and fighting through uncertainty to keep serving their communities however they can.”
Tariffs and the uncertainty about long-term pricing, especially impacting steel and aluminum from Canada, have created concerns for retailers and their ability to accurately predict costs for long-term projects and future orders.
Unemployment Rates
Michigan’s February 2025 unemployment rate has yet to be reported. In January 2025 the unemployment rate was announced preliminarily at 5.3% in Michigan. Last February, the state’s unemployment rate came in at 4.0%. The national unemployment rate in February rose a notch to 4.1% over January’s 4.0%. Last year, the national unemployment rate was 3.9%.
