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Economy in Brief

Chain Store Sales Finish Month On Firm Note During Holiday Week 
by Tom Moeller   November 30, 2010

This holiday season began with a firm gain in consumer spending. Last week, chain store sales increased 0.5% to recover after the prior week's 0.6% decline. Adding to earlier strength, the rise lifted sales for the month 1.2% above October and it recovered much of the decline during the prior three months. 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 weekly figures are available in Haver's SURVEYW database.

The leading indicator of chain store sales increased 0.8% last week after declines during five of the six prior weeks. The increase left the index level 2.8% above the January low. 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.

Monetary Policy, Labor Markets, and Uncertainty from the Federal Reserve Bank of Minneapolis can be found here.

ICSC-UBS (SA, 1977=100) 11/27/10 11/20/10 11/13/10 Y/Y 2009 2008 2007
Total Weekly Chain Store Sales 506.6 503.9 507.0 3.5% 0.1% 1.4% 2.8%
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