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Economy in Brief

U.S. Chain Store Sales' Momentum Is Negative
by Tom Moeller  October 25, 2011

It's a story of lost momentum. Chain stores sales fell 0.8% last week and the decline pulled the October average so far 0.6% below September. Sales have now fallen 3.6% below the July peak. 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 leading indicator of chain store sales also lost steam this month. It fell 0.5% w/w (+0.2% y/y) in the latest period and reversed the prior week's increase. 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.

The chain store sales data are in Haver's SURVEYW.

ICSC-UBS (SA, 1977=100) 10/22/11 10/15/11 10/8/11 Y/Y 2010 2009 2008
Total Weekly Chain Store Sales 512.3 516.6 516.3 2.4% 2.9% 0.1% 1.4%
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