Harvey Effects Seep into Data
Personal incomes and consumer spending both contracted by 0.1%, after adjusting for inflation in August. Increases in consumer spending were largely in health care.
Effects of Hurricane Harvey, which hit landfall on August 25, had a minor impact on the data. We will see larger disruptions from Harvey and Hurricane Irma in the reports for September.
The devastation and humanitarian crisis triggered by Hurricane Maria will show up on the margins because data for Puerto Rico are not included in the national data. Ripple effects will show up initially as a blow to tourism from trips cancelled to the island. We will have to absorb the economic costs associated with the likely migration of survivors to the mainland.