Economic Data Tracker – 
Hurricane Helene hammers the southeast U.S., but green shoots will come

Trend watch

Hurricane Helene, a Category 4 storm in terms of strength, hit Florida late on Thursday and barreled through Georgia. The deadly storm spun-up tornadoes and intense thunderstorms along with devasting floods, leaving millions without power. Although its speed and force have weakened somewhat, it is currently chugging toward the Mid-South and the Carolinas, as well as the Ohio Valley, and dumping heavy rains.

Accordingly, Helene’s impact will ripple through the activity-based data (slides 5 and 6) over the next few weeks. Nonetheless, air passenger traffic and freight continue to run well-ahead of seasonal patterns. Both will likely get punched by Helene. 

What’s new this week

• 2Q24 economic growth stayed at 3% after revisions, reflecting solid economy (slide 7).
• U.S. growth in prior years revised upward by nearly a half point (slide 8).
• Personal savings rate revised higher, suggesting larger buffer for consumers (slide 9).
• The Fed’s favorite inflation gauge continues cooling (slide 10).
• Big 4 indicators point toward continued growth for U.S. economy (slide 11). Updated following the release of personal income and spending.
• New durable goods orders flattish but core orders up in August (slide 12).

Our take

Another week, another solid batch of economic data. This past week’s data was highlighted by upward revisions to the personal incomes and the savings rate for the past few years, and continued cooling in the Federal Reserve’s (Fed) favorite inflation gauge. Moreover, there were upward revisions to overall economic growth for the prior few years. While the upward revisions help explain how consumers have been able to maintain solid spending, the data is way far back in the rearview mirror to matter in any practical sense.

More importantly, any positive vibes from the economic data are tempered by the knowledge that Hurricane Helene has literally ripped a wide swath of destruction through the southeastern United States.

The storm’s devastation is heartbreaking, having claimed roughly two dozen people and upending the lives of countless thousands more.

The silver lining is that Americans are resilient, with neighbors helping neighbors and strangers alike to get through times of crisis. It will take days and weeks to clean up the debris left behind. It will take months and in some cases years to rebuild.

Yet, its remarkable just how resilient nature and people can be. I saw this firsthand a few weeks ago while on vacation. A large fire broke out in an area adjacent to the hotel my family was staying, burning several homes, cars, and structures over a nearly quarter mile stretch. It came within a few feet of the backside of the hotel. (Thankfully, no one was hurt.)

Remarkably, within five days, there were small green shoots from plants poking through the charred landscape. Birds and other small critters were also returning within the next few days, while others scavenged through the rubble, using bits and pieces to rebuild nests. We were amazed how quickly nature was recovering from such a devastating event.

Similarly, the rebuilding efforts following Hurricane Helene will start slowly but will eventually be additive to economic growth in the coming months and quarters. For example, workers will be hired to clear and haul away debris, while others will start the process of rebuilding. Those who lost will buy replacement cars and furnishings, etc., which begets further demand for goods and services.  

Bottom line

We maintain our view that the U.S. economy is cooling but not weak, especially when compared to pre-pandemic figures. While the Federal Reserve has begun lowering interest rates to support economic growth, the process of normalizing rates has just started and will take time to unfold.