Hurricanes Cause Retail Sales, Industrial Output To Drop To Six-Month Low
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U.S. retail sales dropped in August after Hurricane Harvey caused major disruptions in activity.
Both retail and vehicle sales declined in August with a drop of 0.2% for retail and 1.6% for vehicle sales. Economists had previously predicted retail sales would rise 0.1%, instead they dropped to their lowest level in six months, Reuters reports. Hurricane Irma, which hit Florida in the middle of September, is predicted to impact the economy as well.
In Houston, damage to retail outlets was felt most heavily in neighborhood and strip centers in the hardest-hit areas, including Kingswood, Cypress and West Houston. Despite these local areas suffering from damage and destruction, experts predict sales will bounce back quickly as people begin to rebuild and spend money on items such as household furniture and home improvements.
While experts project retail will make a fast recovery, other sectors — like single-family — could face longer-term consequences.
An estimated 100,000 homes were destroyed or damaged during the hurricane in Houston and in addition to suffering serious property damage, the area, which had already been facing issues with construction labor shortages, could now face such a severe crisis it could affect the overall U.S. economy by forcing a rise in material costs and driving down the unemployment rate for construction workers even further.