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Economy in Brief

U.S. Chain Store Sales Remain Lackluster
by Tom Moeller   September 28, 2010

Consumers continued to hold back on their spending last week and for September as a whole. Weekly chain store sales last week gained back just 0.4% of the prior week's 1.4% decline. For September, average sales fell 0.9% from August when they dropped 0.8%. 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 fell 0.9% last week following a 0.2% downtick. Nevertheless, for September so far the index rose 0.7% from August and was the highest since March. 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) 09/25/10 09/18/10 09/11/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 502.5 500.4 507.3 3.6% 0.1% 1.4% 2.8%
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