A report published Monday by USA Today states that Hurricanes Harvey and Irma had fluctuating effects on the economy, specifically housing starts. For example, car sales were up and housing starts were down in September while those trends are likely to be reversed once October data is released, according to USA Today.
USA Today reports on more evidence of the hurricanes having mixed results on the economy in September and October. While disruptions to refineries caused a spike in gasoline prices in September, pump prices fell nearly 1.5 percent in October, according to PNC Financial Services Group as cited in the report.
Most telling of the effects of the hurricane, housing starts in September fell 4.7 percent. However, USA Today reports that economists expect the Department of Commerce on Friday to report an October rebound with starts rising 5.4 percent.
The exact opposite happened with retail prices going up, as sales were bolstered by the hurricanes in September. Retail prices then only had a 0.1 percent increase, according to USA Today. These facts are not all telling, however. The report states that sales online and at clothing stores rose sharply while furniture, electronics, sporting goods and health and personal care stores all experienced drops.
However, core prices, which don’t include volatile food and energy items, rose only modestly in September, despite damaged homes and vehicles being expected to push rent and auto prices up considerably, according to Lewis Alexander, an economist cited by USA Today. October data is expected to show a lag.
Finally, the report states that the Labor Department is expected to report merely a 0.1 percent rise in consumer prices on Wednesday, which will push the annual gain to 2 percent from 2.2 percent. Core prices are also expected to rise by 0.2 percent, which leaves the 12-month increase unchanged at 1.7 percent.
Despite all this, the Federal Reserve is still expected to raise interest rates in December.