October 16, 2018

The “Bastiat Boom”

Retail sales frustrated expectations. It´s not that consumer spending is weakening but is now being properly measured again. After Harvey hit in August 2017, there were a lot of “broken windows” that had to be replaced. Auto is a case in point. Between May and August of this year, retail sales growth averaged 6.5% year-on-year. In September growth dropped to 3.1% (not seasonally adjusted). Some say it reflected Florence´s disruptions. That´s unlikely. In August 2017, retail sales increased 4.1% despite Harvey´s much greater destruction! The “windows replacement effect” has petered out, so now changes are reverting to type, a truer reflection… Read More