Weather could lead to weak market


The recent severe winter weather could be a reason for the weak job reports during December and January. It is no question that recent snow storms have forced stores to close, causing inventory to back up and revenue to decline. Car dealerships, for example, are faced with slow moving inventory as their lots become covered with snow. The stores that decided to remain open during the storms saw little activity as many consumers decided to stay off the roads. Many employers were also faced with decreased productivity as poor commuting conditions forced employees to remain home. In regards to road transportation, trucks were slowed while carrying freight such as materials or finished goods. Slowed road transportation could result in orders not being filled and manufacturing processes coming to a halt.
However, even undesirable situations can produce positive outcomes. For example, consider how transportation delays impact hotels. As passengers find their transportation delayed, they will search for shelter, increasing the demand for hotel rooms. Another example of winter storms being beneficial is in respect to towing companies. There will be an increased demand for the services provided by towing companies as cars may not operate as efficiently when driving through snow and ice.
It is difficult to determine the aggregate impact of severe winter weather on the economy. While some companies are suffering, others are benefiting. Although the job report for January fell below expectations, construction jobs were among the most common jobs added in January. Normally construction would be slowed by cold and harsh weather, so this indicates that the weather may not have impacted the economy as much as it initially seemed to. It will be interesting to see how the February job report turns out after already having had several winter storms this month.

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