Cold Snap Has Chilling Impact On Economy
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MINNEAPOLIS, Minn. (WCCO) – It’s a busy Friday afternoon at Parc Boutique in northeast Minneapolis. Racks full of women’s fashions greet the customers.
But Parc’s owner, Thao Nguyen, says the recent cold snap has hurt her in-store sales.
“It’s harder for people to come into the shop,” Nguyen said.
Just like how tornadoes and hurricanes disrupt economic activity, there is also a steep cost to our cold weather. The lower the temperature drops, the fewer of us venture outside to shop, dine and recreate.
Toby Madden, regional economist with the Federal Reserve Bank of Minneapolis, says extremely-cold weather certainly affects the micro economy. But the weather will have little impact on the region’s overall growth.
“To some degree, there is some loss of wealth when the pipes burst and your house floods,” Madden said.
When schools close due to the weather, parents are forced to stay home with their children. Consequently, Madden says, productivity at their workplaces will suffer.
But in the context of a $300 billion regional economy, he says those losses are hard to measure.
“From a big-picture perspective, not much [is] happening; we’re still growing economically,” Madden says. “But from the micro level, there’s lots of disruptions.”
Restaurants see a drop in customers whenever the weather turns bad. That’s why Will Selin, the executive chef at Masu Sushi & Robata, keeps a keen eye on the forecast.
“It’s one of the first things that I check when I go home,” Selin said.
Estimating traffic is crucial when you’re serving the freshest foods. He also doesn’t want to be caught with a full cadre of staff if nobody is coming to the restaurant to eat.
“I don’t want to order extra fish and, you know, have something that we can’t serve the guests,” he said. “So if I have a feeling it’s gonna be slow, I can order one less salmon.”
Homeowners can expect the next heating bill to be close to double the amount paid in December, which is merely the cost of keeping warm in Minnesota.
But Thao Nguyen looks on the bright side.
“If it’s cold outside and dark and dreary, a little retail therapy helps a lot,” she says.