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October 14, 2017 | Retail Sales Jump Due to Hurricane Impact: GDP Impact?

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Retail sales in September increased 1.6 percent from August. Hurricane impacts are clearly in play.

The Census Department Advance Estimates of U.S. Retail and Food Services report shows seasonally-adjusted retail and food services sales for September 2017,were $483.9 billion, an increase of 1.6 percent from August. The hurricane Impacts are noticeable.

Percentage Gains From August

  • Retail trade sales rose 1.7 percent
  • Motor vehicles rose 3.6%
  • Building materials rose 2.1%
  • Gasoline rose 5.8%

In contrast, electronics, health care, sporting good and hobbies, department stores, and miscellaneous retailers were all lower.

Continuing the trend towards online shopping, nonstore retailers rose 0.5%

GDP Impact?

A separate census report shows Inventories also rose today. Thus, on the surface, it may look like a big boost to GDP is coming.

However, Income was lost. Stores in impacted areas were closed.

I am also unsure what happens to the valuation of change in private inventories (CIPI). Inventories were destroyed and replaced. It’s a crap shoot how the BEA will calculate the impact on inventories.

William Dudley, New York Fed president, says Hurricane Effect to Provide Long Run Benefit.

Dudley is wrong. Hurricanes are not good for the economy. If they were, Puerto Rico would be a bastion of strength.

Mike “Mish” Shedlock

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October 14th, 2017

Posted In: Mish Talk

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