Economy

Cold Weather Could Undermine Holiday Sales

Thinkstock

The measure of gross domestic product (GDP) for the first quarter of 2014 was wrecked by bad weather, according to many experts, even the White House. An extended period of deep cold and winter storms had kept consumers inside. With a polar vortex currently swirling well into places as far south as Texas and plunging large cities in the northern tier of states to levels below zero, the holiday season’s modest growth from last year is threatened.

When GDP grew only 0.1% in first quarter of 2014, the White House released a statement:

Today’s GDP estimate is subject to a number of notable influences, including historically severe winter weather, which temporarily lowered growth in the first quarter.

Obviously, the frigid weather has to be prolonged and hit at a time of maximum consumer activity. The first of two polar vortex events was a few days ago. The next will hit this weekend, at the peak of the late shopping season. Snow is forecast to snarl many of the Midwest’s largest cities, as well as the mountain states in the West and upper New England. Wind chill measurements are expected to drop toward zero in New York City, with wind gusts over 50 miles per hour.

Under the circumstances, driving conditions will be poor, and some people will refuse the brave the cold, even if the weather is otherwise clear.

As a coda: the cold weather winner will be Amazon.com Inc. (NASDAQ: AMZN), which is already benefiting from a rush of e-commerce that has extended to portable devices, especially smartphones. People who do not want to leave their homes can go out metaphorically via broadband. Amazon’s revenue will not be enough to offset a sharp drop in overall shopping activity, but it could help.

Cold weather may be a partially undoing of what was a modestly promising holiday season.

Sponsored: Want to Retire Early? Here’s a Great First Step

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.