Do Big Storms Hurt the Economy?
When Katrina devastated much of the Gulf coast and crushed New Orleans, several economists said the effects would hurt national gross domestic product. Economic activity in the region would slow, in some cases to a stop. Other economists argued that…
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The storm will reach the East Coast as the holiday shopping season is at its very start, and a much less important holiday — Halloween occurs. The malls may not be as crowded, but people could shop later.
Car dealers will see less traffic, but car buyers usually take their time. Those people can, and probably will, shop later.
Some businesses may close for a day or two because of the storm. Can they make up the lost revenue? That depends on the type of business.
Home supply stores ought to get a small boost in sales. People will buy plywood and flashlights at Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW). Supermarkets should see extra traffic, too. Residents in the area that the storm will hit ought to buy water and canned food. And there will be repair crews working all over after the storm.
If the storm is fierce enough, even the stock markets may shut for a day and banks may close. It is anyone’s guess how that will affect the financial services industry. The stock market does not lend much to GDP, and banks will reopen in a day or two.
The argument that the storm will undermine GDP growth is foolish, but that will not stop the debate about the economic outcome.
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
