How Weather Affects the Economy

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How Weather Affects the Economy What does a tropical storm mean to you? To many, it means merely a storm with rain and wind. But to others in coastal areas, it means horrible weather that can possibly be life-changing. Tropical storms affect prices, trading, and other aspects of the economy. When trade is affected by tropical storms, we can experience shortages, higher prices and even a temporary absence of supply. The forecasters at the National Ocean and Atmospheric Administration are predicting a total of twelve to seventeen tropical storms in 2012, in addition to five to eight hurricanes. Two to three of the hurricanes may become major threats (Associated, 2012). The National Weather Service states that this year could feature about 10% to 60% more storms than average in the Atlantic Ocean. So far, this year remains among the top five more active seasons when compared to others this time of year (Holthaus, 2012). Bad weather affects the tourism industry, which is the number one source of income for some countries. Even in the United States, hurricanes will destroy so much of the coastal region that businesses and residents suffer for years. The stock market can be sensitive to hurricane predictions. For example, this past May, futures for orange juice climbed 7% in anticipation of storms Alberto and Beryl, even though Alberto eventually missed land and Beryl caused no damage to citrus groves at all. Hurricane Wilma, which occurred in October 2005, damaged citrus groves, causing a shortage of 24.4 million 90-pound boxes of oranges, a loss of 13 percent. As Boyd Cruel puts it, “Just watch the track, and when it gets closer, you’re going to see traders really react to the storm.” (Wexler, 2012) The effect that weather has on any specific industry can have ripple effects across the economy. One thing to consider with the US economy is it is largely
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