WASHINGTON — Republican presidential candidate John McCain conceded battleground Michigan to Democrat Barack Obama yesterday, a major retreat as he struggles to regain his footing in a campaign increasingly dominated by economic issues.

In another sign of McCain's woes, his campaign signaled that it would counter Obama's efforts in Indiana, a state that hasn't voted for a Democrat since 1964. And, a New Hampshire survey showed the Republican trailing by double digits.

With polls showing Obama leading comfortably, McCain's campaign confirmed it was pulling staff and advertising out of economically distressed Michigan, and one adviser said it was "off the list." The GOP nominee also canceled a visit there next week. Michigan, with 17 electoral votes, voted for Democrat John Kerry in 2004, but Republicans had poured money into an effort to place it in their column this year.

"Operations will be scaled back," said Mike DuHaime, the campaign's political director.

In Indiana, surveys show a competitive race after Obama spent months pouring money into the state and Republicans resisted countering. Now the Republican National Committee is running TV ads to fight for the state's 11 votes, and McCain senior adviser Greg Strimple said: "We're going to go there."

Separately, a Saint Anselm College Institute of Politics poll showed Obama leading McCain 49 percent to 37 percent in New Hampshire, a state Kerry narrowly won four years ago.

McCain's decision about Michigan means Obama can shift money to other states like Virginia, Colorado and North Carolina — traditional Republican territory.