Sunday, February 23, 2014
Economy suffering from a cold?
This article focused on the current seasonal fluctuations of the economy, and more specifically-- the role weather plays in regards to the seasonal fluctuations. Consumer spending is down during the winter months due to the cold and in many places the poor driving conditions. Many consumers attempt to wait out the winter months before making their purchases in March and April, when spending and growth bounces back to normal. It is not only consumer spending that takes a toll due to weather conditions, it is also the shipping of many important natural resources such as coal and oil. The difficulty involved in shipping these items during the winter months when driving conditions are far from ideal, are often associated in slight price increases for the resources.
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This makes quite a bit of sense. Consumer spending would decrease when weather is too cold and driving conditions become dangerous. However, this could also have been because of the higher prices of coal and natural gas. Heating costs would have risen with prices of these resources increasing, meaning people would have to pay more to stay warm. Some work places and schools were also closed on multiple occasions, meaning some had less income during the cold months. Also, with children being out of school, people may have had to spend more on food since the kids would be home for meals such as lunch rather than at school. Both of these situations lead to less money left over for consumers to spend, meaning lower consumption for those months and another hinder to the economy's growth.
ReplyDeleteI agree with Chrissy. It is very expensive to heat places in the winter so this might have aided in the decrease of consumer spending. Also, after the holidays typically people might not have a lot of money to spend, nor do they want to because they have already spent a lot of money. This was a very cold and brutal winter meaning that it was hard for a lot of people to get places, especially if they were from areas that typically do not see a lot of snow. I think spending was probably down a lot in southern states because consumers were not used to the snow.
ReplyDeleteI think that it is really interesting with the amount of articles that have recently been published about the weather. I never really realized the impact that the weather can make on the economy. I agree, it is harder to spend more money on heating and shipping goods. It is especially interesting that spending is expected to pick back up again in March and April, however there is still controversy over how much the total growth will be.
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