Big Picture: Retail Sales to Provide First Glimpse of Hurricane’s Impact
This morning’s October retail sales report will be the first leading monthly data series to reflect the impact of Hurricane Sandy. The report will probably document a transitory shift in the composition of demand away from household discretionary items toward consumer staples and building materials.
Due to some homeowners’ lack of flood insurance and the slow nature of the rebuilding process after Hurricane Sandy, the recent pace of retail spending may slow,altering the previously established trend in personal consumption. Because of the extensive damage caused by the storm, the reallocation of spending will probably be a multi-month phenomenon that will eventually be partially reversed early next year.