US retail sales have dropped, and while may claim this is unexpected, it should not be. Hurricane Harvey has a lot to answer for. According to the US Commerce Department, retail sales fell by 0.2% in August. This compares badly with July, when retail sales increased by 0.3%. Much, if not all, of August’s retail sales drop was due to a plunge in motor sales. Car sales dropped by 1.6%.
The flooding caused by Hurricane Harvey was responsible for a drop in US retail sales in general, but it may have given rise to another market. Automobiles damaged or wrecked during the floods will have to be replaced. This may result in a short-term boost in car sales.
August, in general, was a fairly good month for retail vehicle sales. They increased by 3.2% more in August than in August last year. This displays a healthy demand before Harvey hit. There has been a mixed reception to Hurricane Harvey among retailers.
Some have seen no difference in sales while others have seen a significant drop. However, some businesses experienced an increase in retail sales. These were firms that offered DIY products and others needed for home repair. Hurricane repairs assist sales. Companies offering other products and services to help those hit by the hurricane also benefited.
Sales of building materials to repair hurricane damage are set to be high in September. It is not only because of damage after Hurricane Harvey but also in Florida after Hurricane Irma. These figures might give a false assessment of US retail sales in general. Consumer spending is an important metric in the US because it accounts for around 66% of US economic activity.
Mall store sales have been steadily dropping as increasing numbers of people turn to Amazon and other online shopping companies. Although many stores are now going online and offering delivery of products, Amazon is still king in the US, with the online website of Wal-Mart a close second. Mall stores have suffered as a result. Sales of clothing, appliance, and electronics products have dropped by up to 1%.
Many retailers, particularly department stores, are struggling due to the Amazon effect. However, US retail sales are dropping even at online sites. Online retail sales dropped by around 1.1% in August. In general, retail sales for August dropped by 0.2%. That compares with an estimated increase of 0.2%. Not all of that has to do with hurricanes.
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