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Economy in Brief

U.S. Chain Store Sales Collapsed, But Did They?
by Tom Moeller December 4, 2007

In the biggest weekly decline since 2006, chain store sales collapsed 2.0% w/w in the final period of this year, according to the International Council of Shopping Centers (ICSC)-UBS.

The decline probably is not indicative, however, of the true extent of a weakening in consumer demand. The variable timing of the Thanksgiving holiday has created similar downdrafts in this seasonally adjusted measure during the last several years. Sales in the next week, each year, have bounced back sharply.

Sales during all of November fell 0.2% from the October average which fell 0.1% from September. The latest m/m decline was the sixth in the last seven months.

During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.

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 fell 0.1% (-1.6% y/y) for the third consecutive weekly decline.

Market Bailouts and the "Fed Put" is last week's speech by William Poole, President of the Federal Reserve Bank of St. Louis and it is available here.

What Do You Get for "Sixteen Tons"? is analysis from the Federal Reserve Bank of St. Louis of average hourly earnings and labor income. It can be found here.

ICSC-UBS (SA, 1977=100) 12/011/07 11/24/07 Y/Y 2006 2005 2004
Total Weekly Chain Store Sales 468.5 478.2 3.1% 3.3% 3.6% 4.7%
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