Economy Watch: Blizzard Puts Crimp in Northeast Retail Sales
The recent East Coast blizzard kept about $1 billion at home with consumers, and the number of delinquent residential borrowers who started mortgage modifications dropped in 3Q10.
By Dees Stribling, Contributing Editor
ShopperTrak, which followed U.S. retail sales, said on Wednesday that the recent East Coast blizzard kept about $1 billion at home with consumers, rather than out being spent at shops on Dec. 26 and Dec. 27. That’s assuming a 10 percent impact on sales for the two days, which ShopperTrak estimates at about $10 billion.
The company said that on Dec. 26, foot traffic at retailers in the northeastern U.S. was down 6.1 percent compared with 2009; in the rest of the country, the gain in foot traffic was 38.6 percent compared with last year. On Dec. 27, things were even more lopsided: Foot traffic dropped 42.9 percent in the Northeast compared with a year ago, while in the rest of the country, it was up 13 percent.
“As expected, the 2010 blizzard throughout the Northeast halted nearly all retail visits and spending during a period that is fairly crucial for retailers,” Bill Martin, founder of ShopperTrak, said in a statement. “While we do think there will be some retail strength later this week and into the weekend as folks begin to dig out, it will be interesting to see if levels recover in time to boost December sales and the overall holiday shopping season.”
Mortgage modifications drop in 3Q
The U.S. Department of the Treasury’s Office of the Comptroller of the Currency and the Office of Thrift Supervision said on Wednesday that the number of delinquent residential borrowers who started mortgage modifications dropped in 3Q10. A total of about 470,300 modifications were started in the third quarter, down 17 percent from the second quarter and 32 percent from the same quarter in 2009.
The main reason is that more delinquent borrowers are being foreclosed on, or are undertaking short sales. At about 244,800, the number of residential foreclosures and short sales was up 11 percent in 3Q10, quarter-over-quarter, and up 63 percent from a year ago, according to the report. Robo-signing notwithstanding, the foreclosure express chugs along.
“I really can’t forecast whether there’s going to be a continuing decline, but I think we’re going to see more stability,” Bruce Krueger, lead mortgage expert for the Office of the Comptroller, said during a conference call on Wednesday.
Wall Street had a meager up day on Wednesday, with the Dow Jones Industrial Average rising 9.84 points or 0.09 percent. The S&P 500 gained a 0.1 percent, and the Nasdaq advanced 0.15 percent.