How The iPhone 5 May Have Already Hurt The Economy

You’ve read the reports about the iPhone 5 contributing up to 0.5% in GDP growth.

But this may be the flipside…

On Friday, August retail sales were disappointingly weak, with “control” sales (excluding gas, auto, etc.) up just 0.1% vs. expectations of 0.4%.

But even within “control” most of the numbers weren’t that bad.

Here’s SocGen:

Excluding reported increases in auto, building materials and gasoline purchases, retail “control” – the portion of the Census Bureau’s report that is used by the Bureau of Economic Analysis to estimate nominal goods spending – was little changed (-0.01%) in August, following a 0.8% pop in July. Within the “control” group, a solid acceleration in restaurant sales (0.5% from 0.3% in July) was countered by a surprising falloff in general merchandise (-0.3%) and electronics (-1.4%) purchases.

Indeed, a look at the table of results shows that the sequential and year-over-year change in electronics was particularly weak.


Weakness could be attributed to general consumer weakness, but when you see food services & drinking places sales rising nicely, one wouldn’t presume that consumers are any more stretched than they’ve been recently.

It seems plausible that if the iPhone 5 is going to have such a positive impact on the economy, then the much-hyped device may have been a drag on electronics spending (as everyone saved up for the biggest consumer electronics release in history) during the month before the launch.

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