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Economy in Brief

U.S. Chain Store Sales Reach A Record Level At Year-end
by Tom Moeller   January 04, 2011

Shopping is what consumers do, especially during the holidays. Reflecting that inclination, sales at chain stores increased another 0.4% last week to a record high. The increase followed three weeks of strong increase. However, since the latest increases 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 again held roughly 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) 1/1/11 12/25/10 12/18/10 Y/Y 2010 2009 2008
Total Weekly Chain Store Sales 515.7 513.4 508.4 3.6% 2.9% 0.1% 1.4%
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