The decline in retail sales in October 2012 is being attributed to Hurricane Sandy:
Retail sales fell in October as American consumers pulled back after a three-month shopping spree and superstorm Sandy slammed into the East Coast, shutting malls and auto showrooms.
The 0.3 percent drop followed a 1.3 percent increase in September that was larger than previously reported, Commerce Department figures showed today in Washington. While it was able to collect information from the affected area, the agency said it couldn’t quantify the impact of the biggest Atlantic storm.
Companies such as General Motors Co. (GM) and Ford Motor Co. (F) said last month’s storm-related sales slump will probably reverse as brighter job prospects, rising home prices and sturdier finances boost household confidence. At the same time, today’s report showed Americans bought fewer non-essentials, which may reflect mounting concern over possible tax changes and limited wage growth that pose risks for the biggest part of the economy.
“Some of it is due to hurricane taking away some discretionary sales,” said Jonathan Basile, director of U.S. economics at Credit Suisse in New York. “Spending still seems subpar, and consumers are facing headwinds on their paychecks and incomes. They’re also faced with uncertainties about taxes going into year-end.”
I’m trying to get my head around this. Tropical storm winds and rain striking the South-East of the United States on October 25 through 27th and the hurricane the East Coast on October 29 reduced retail sales by 0.3%? Wouldn’t stocking up and moving purchases forward in anticipation of the storm have offset this? Wouldn’t the additional buying in Florida, Georgia, the Carolinas, and Virginia to repair the damage done by the storm have offset the closing of stores in the Mid-Atlantic on the 29-31st?
At least we can rejoice in November’s figures (seasonally adjusted) being much, much better due to all of the economic good the destruction will produce.
ZeroHedge sees the result about the way I do:
The just announced October retail sales tumbled, with their worst miss of expectations since May 2010, and the first sequential decline since June: printing at -0.3% for both the headline and the ‘ex autos and gas’, on expectations of a -0.2% and +0.4% rise. Ignoring for a second that the Commerce Department said that Hurricane Sandy had both positive (remember those massive lines in various stores ahead of Sandy) and negative impacts on retail sales, it would be truly inconceivable for the sellside Wall Street consensus of diploma’ed PhDs, which knew about Sandy’s impact on retail sales well in advance, and thus could adjust its numbers, to actually, you know, adjust its numbers. Either way there is no way to spin the longer term major store sales trend (last chart), which shows that the US consumer, out of money, out of credit, and out of savings is entering the holiday season with little to zero disposable spending power.
Check out the graph illustrating retail sales slowing more or less progressively since March.