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Economy in Brief

U.S. Weekly Chain Store Sales Continue Higher
by Tom Moeller July 27, 2010

Consumers seem willing to spend even though we've seen a souring in sentiment and confidence. Chain store sales rose 0.6% last week after the prior period's 1.4% jump. Together, these increases pulled sales for the month 1.9% above June's average following that month's very slight decline. 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. General merchandise store sales account for 15% of total retail sales.

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.

Unfortunately, the leading indicator of chain store sales fell a sharp 0.8% and reversed most of the gains during the prior five weeks. 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) 07/24/10 07/17/10 07/10/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 515.4 512.3 505.3 3.8% 0.1% 1.4% 2.8%
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