unlikely to be large. But employment data, consumer spending, and manufacturing numbers may become difficult to analyze... especially if more storms reach land this hurricane season. In 2017, the effects of Hurricanes Harvey and Irma hindered activity in the third quarter of the year, but spurred rebuilding later and well into 2018. And when Harvey made landfall in the end of August, initial filings for unemployment benefits in the area surged in the following weeks... the most since 2012. Fortunately, despite Hurricane Florence’s record-breaking size and potential damages, analysts believe that any job losses will be temporary and of little concern. Consumer spending should see a spike due to pre- and post-storm purchasing in sectors like food, home improvement, but spending on discretionary items and entertainment are expected to take a hit. Automakers could also see a sudden but brief boost as Americans are forced to replace vehicles damaged or lost in the storm. (After Hurricane Harvey, auto sales soared to a 12- year high weeks later.) Oil production and new home starts could also take a hit, with the latter being the most likely if Florence continues on its current path. In short, analysts expect the overall economic effects of Florence to be minimal. Certain sectors will see spikes or lulls, but any major impact will likely be confined to local rebuilding and clean-up efforts.
Cryptos drop more than the dot- com crash...
This week, a leading cryptocurrency index fell by 80% from its most recent high in January. That’s worse than the 78% decline in the Nasdaq Composite Index after the dot-com bubble burst in 2000. And just like the dot-com boom, cryptocurrency investors who bet big on a seemingly revolutionary technology are taking a painful hit to their virtual wallets... particularly those in secondary tokens, also known as “alt-coins.” These losses were led by this ether, the second-largest crypto, contributing to a month-to-date 40% drop in the virtual currency. Crypto bulls are quick to note that the Nasdaq was hitting new highs only 15 years later... and that bitcoin has recovered from similar crashes. But an 80% plummet in an asset class worth nearly $200 billion is hardly a drop in the bucket. We’re still interested in this sector... but we’re keeping our rent money far away. As we go to press, Hurricane Florence is about to make landfall on the South Carolina coast. Forecast as the worst storm to hit the Carolinas in 64 years, with as much as 40 inches of rain, massive flooding, and wind as strong as 74 miles per hour. While it’s too soon to estimate the scope of property and infrastructure damage the storm will leave in its wake, the economic impact is The storm of the century?
American Consequences 15
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