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Economy in Brief

U.S. Chain Store Sales Build On Earlier Holiday Strength
by Tom Moeller  December 28, 2010

The holiday spirit held right up until Christmas. Sales at chain stores increased 1.0% last week to the highest level since early-August. The increase followed a 1.7% gain during the week earlier. However, since the latest surges followed weakness early in the month, December sales overall remained down 0.4% from the November average. During the last ten years there has been a 66% 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.

The leading indicator of chain store sales held steady last week. The index has moved sideways since August. 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) 12/25/10 12/18/10 12/11/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 513.4 508.4 499.9 4.2% 0.1% 1.4% 2.8%
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