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Economy in Brief

U.S. Weekly Chain Store Sales' Improvement Volatile But Real
by Tom Moeller June 8, 2010

Consumers continued to hold their breath after their late-April shopping spree. Chain store sales last week rose just modestly but roughly equaled the May average. In turn, they were down from the April high. However, versus late-February sales broke from the earlier malaise and rose 3.6%.

During the last ten years there has been a 68% correlation between the y/y change in chain store sales and the change in retail sales at general merchandise stores. That correlation recently has increased.

The ICSC-Goldman Sachs 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. During the last ten years there has been a 69% correlation between the year-to-year growth in chain store sales and the growth in general merchandise retail sales. The weekly figures are available in Haver's SURVEYW database.

The leading indicator of chain store sales continued to move sideways. During all of May it equaled April but was at the high end of the range in place since the middle of last year. Nevertheless, stability in the index compares to roughly 6% y/y declines late in 2008. The composite leading economic indicator is compiled from four series: (1) the MBA's volume index of mortgage applications for home purchase (2) the ABC News/Money magazine's survey of consumer buying conditions (3) new filings for jobless benefits and (4) the 30-year government bond yield. 

ICSC-UBS (SA, 1977=100) 06/05/10 05/29/10 05/22/10 y/y 2009 2008 2007
Total Weekly Chain Store Sales 503.5 499.7 496.7 3.1% 0.1% 1.4% 2.8%
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