Harvey delivers hit to U.S. retail sales and factory output

ECONOMY

WASHINGTON• Hurricane Harvey is taking a swipe at the U.S. economy this quarter, though not all of the slowdown can be blamed on the storm.

Three reports on Friday put the impact of the Texas flooding into focus: Retail sales fell last month, according to the Commerce Department; Harvey pushed down factory production in August, the Federal Reserve said; and concern about the economic and inflationary effects of Harvey and Hurricane Irma l ed consumer sentiment to fall in September, a University of Michigan survey showed.

T he f all out f r om t he storms will take some momentum off third- quarter growth and then probably boost activity later this year and into 2018, when rebuilding efforts are under way.

Weaker results at auto dealerships played a big role in the pullback in retail sales, partly reflecting the hurricane impact and also the ongoing slowdown in the industry. Purchases at vehicles and parts dealers dropped 1.6 per cent in August after no change in July. Overall, only five of 13 major retail cat- egories showed a decline last month, while furniture outlets and restaurants posted sales gains.

Factory output wavered in August after Har vey slammed into the nation’s energy heartland. The decline was the largest since May and reflected a 0.9 per cent slump in the production of non-durable goods including chemicals and petroleum, the worst since January 2014.