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Economy in Brief

U.S. Chain Store Sales Stabilize After Three-Week Decline
by Tom Moeller August 24, 2010

Consumers showed less spending restraint last week after a pullback from July's largess. Weekly chain store sales nudged up 0.2% but that still left sales off 1.4% from the July high. So far this month, sales are down 0.5% from the July average following that month's 2.0% increase. During the last ten years there has been a 68% 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 last week (+0.6% y/y) recovered merely a piece of the decline since early-July. 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.

Future Recession Risks from the Federal Reserve Bank of San Francisco can be found here.

ICSC-UBS (SA, 1977=100) 08/21/10 08/14/10 08/07/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 508.2 507.2 514.1 2.9% 0.1% 1.4% 2.8%
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