Severe weather not only creates safety issues, but can also have a chilling effect on economies. Not all sectors react the same, however, and some can actually benefit.
CGTN’s Karina Huber explains.
The “bomb cyclone” has left around 80,000 homes and businesses without power and forced the cancellation of nearly 5,000 flights. There were also delays on AMTRAK, the country’s main rail service, and many people were told to stay home and not come into work.
As with most storms, this system is creating winners and losers for the economy.
“Clearly, anybody that’s making gloves or scarves and warm winter coats, they’ve been big winners over the past two weeks,” Cary Leahey, senior economist at Decision Economics, said.
Another big winner: utility providers. When temperatures plummet, demand for heating skyrockets.
On the losing side, however, are the transportation and tourism industries. Disneyworld, SeaWorld and Universal Studios, all in the usually sunny Florida, had to temporarily shut their gates.
Restaurants also get hit. Planalytics, which monitors weather-related businesses, expects restaurant traffic to be down 10 percent in the first week of January.
Home sales could also be negatively impacted. But retail sales, the main driver of the U.S. economy, can experience a boon when bad weather is expected.
“Depending on how it’s measured, you end up having retail sales tending to do a little bit better over a two to three-month span, because people are stocking up on necessities, and then they have to buy a lot of stuff that got ruined,” according to Leahey.
Streets in at least one New England city were turned into rivers of ice, freezing some cars in place.
Retailers also dodged a frozen bullet this time around, because the storm didn’t hit during the peak shopping season in December.
“If you had interrupted people during the holiday season, then it would’ve been quite a bit more disruption,” Robert Brusca, chief economist at Face & Opinion, said.
But overall, both Brusca and Leahey don’t expect the U.S. economy will have been hit too hard.
“You could take a couple of tenths off of GDP growth,”according to Brusca. “It could be more than that if it continues. The question is how much it continues.”
The cold snap is expected to last throughout the weekend, but temperatures should warm up by Monday.