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Economy in Brief

Chain Store Sales Down Again. Gasoline Prices Still Falling
by Tom Moeller September 26, 2006

The International Council of Shopping Centers (ICSC)-UBS reported another drop in chain store sales last week. The 0.6% decline was the third drop in a as many weeks and left the average of sales in September 0.3% below August.

During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.

Last week, the retail price for a gallon of regular unleaded gasoline dropped another twelve cents w/w to an average $2.38 (-15.3% y/y), the lowest level since early March. In spot market trading yesterday, the NY harbor price for regular unleaded gasoline continued its recent decline and fell three cents from Friday to $1.49, versus an average $1.53 last week.

The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

The leading indicator of chain store sales from ICSC-UBS gave back nearly all of the prior period's increase with a 0.6% decline last week (+0.5% y/y).

The latest Short-Term Energy Outlook from the U.S. Energy Information Administration is available here.

ICSC-UBS (SA, 1977=100) 09/23/06 09/16/06 Y/Y 2005 2004 2003
Total Weekly Chain Store Sales 464.2 466.8 4.2% 3.6% 4.7% 2.9%
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