Chain store sales fell again according to the International Council of Shopping Centers (ICSC)-UBS survey. Last week's 0.3% decline marked the fourth consecutive weekly skid and dropped the August sales average 0.1% below July which rose 0.8% from June.

During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.

Recent weakness in chain store sales has accompanied the spurt in gasoline prices. Last week, gasoline prices were about stable w/w at $2.61 per gallon, a level up 46% since the start of this year. The spot price of gasoline this week is up another 10% w/w.

The leading indicator of chain store sales from ICSC gave back half of the prior week's rise. The indicator's recent erratic movement has left the August average 0.3% below July which fell 0.4% from June.

The ICSC-UBS 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.

Reflections on central banking, remarks by Federal Reserve Chairman Alan Greenspan, are available here.