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Economy in Brief

U.S. Chain Store Sales Continue Lower
by Tom Moeller  December 11, 2012

Consumer spending is under pressure according to the latest report from the International Council of Shopping Centers and Goldman Sachs. Chain store sales fell 0.7% last week and added to the 3.1% drop during the prior period. The latest level was 1.3% below the November average and reversed that month's 0.8% rise. During the last ten years there has been a 72% 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.

Despite the decline in actual sales, prospects for consumer purchases improved. The leading indicator of chain store sales rose 0.8% w/w. The gain pulled the index to a record high. 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-Goldman Sachs (SA, 1977=100) 12/08/12 12/01/12 11/24/12 Y/Y 2011 2010 2009
Total Weekly Chain Store Sales 527.3 531.0 548.0 2.5% 3.2% 2.9% 0.1%
   W/W % -0.7 -3.1 3.3 -- -- -- --
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