Frozenomics: winter weather rocks market

Transportation revenues drop

ANDREA RICKETTI
STAFF WRITER

This winter’s polar vortex has provided great joy for students across the country. Schools have been closed, which has allowed college students to feel like kids again. While students can unanimously celebrate the polar vortex, the economy can only disapprove. All across America the record setting snowfall and temp have been taking a toll on businesses. Transportation revenues have dropped dramatically, resulting in devastation for airline, transit and bus companies.
There has been an immense amount of snow since January. Within two days, airlines had to cancel 7,000 flights. The past two months have been consistent chaos for airlines in particular because they have had to deal with reimbursements and angry customers. Amtrak has also been a victim of the poor weather and had to decrease its operating times throughout the Northeast region of the country.  The terrible road conditions led to an increase in cancelations for bus companies such as Martz, Greyhound and PeterPan, as people feared taking a bus in icy conditions.
While it is obvious that transportation companies would suffer greatly from the winter vortex, a slew of other businesses have taken a hit. Kris Dawsey, a Goldman Sachs Group Inc. analyst, examined the average reports over the January period. Dawsey concluded that construction employment is a major enterprise that has been affected by this weather. Auto sales have also become extremely weak in the winter months. This directly affects workers whose salaries are based on commission who have been unable to make sales.
It is evident that the weather and extreme conditions have affected major corporations, but smaller, local businesses are taking a toll as well. People are less willing to leave their house in these harsh conditions, which makes sales for shopping malls across the country decrease.  Stores are hosting blow-out sales to attract more customers, but people are unwilling to drive in icy conditions. The food industry is taking a massive hit, with an estimated 75 percent decrease of business.
The back-to-back storms in the Northeast have dumped several feet of snow in some places, causing power outages and collapsing roofs.  This causes unnecessary and unexpected expenses that one can only hope insurance will cover. The winter has served as a reoccurring headache for people as they need to hire snow services, especially for the elderly.   CNBC conducted a poll that estimated the total cost to the economy at roughly $50 billion dollars.  Job growth has stalled, and an estimated 80,000 jobs were lost due to hazardous weather.  While it is estimated that the economy will return to normal conditions post-winter, it has left a detrimental mark on the economy and the country.

contact the writer:
andrea.ricketti@scranton.edu

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