The coldest air in almost 20 years is sweeping over the central U.S. toward the East Coast, threatening to topple temperature records, ignite energy demand and damage Great Plains winter wheat.
Wind chills plunged past 60 degrees below zero Fahrenheit (minus 51 Celsius) in parts of the upper Midwest. Chicago’s high today won’t reach zero and may just hit that tomorrow, according to the National Weather Service. New York City, which had a pre-dawn reading of 54, will drop to 6 by tomorrow, while the temperature at Dallas Love Field was 16 at 7 a.m. local time.
Winter storms and frigid air add volatility to commodities trading and spot power markets. Natural gas futures in New York have surged more than 20 percent since Nov. 1 as the coldest start to the U.S. heating season in 13 years boosted fuel demand. Last week, as snow and cold gripped the nation, spot power for New York City jumped more than 11-fold in one hour, while wheat climbed the most since mid-October. This week, cities from Minneapolis to Pittsburgh may have record-low highs.
Climatic extremes are becoming more frequent occurrences. Australia is currently experiencing record heat, while during the same week the US is facing what will be the coldest winter in at least twenty years. The Philippines is struggling to recover from record floods. Inevitably, these events are at least short-term blows to GDP growth in the countries most affected.
According to The Seattle Times, flight cancellations due to the ‘polar vortex’ sweeping across much of the USA in the last four days have now exceeded 9000. Energy production will slow, as will consumption with the obvious exception of heating bills. Absenteeism will increase in the worst affected regions. Crops, from winter wheat which is not sufficiently protected by snow to orange groves in Florida are at risk. Restaurants in snow covered regions will suffer, particularly those which are not located in cities. Retail shopping may decline, although less so than in the pre-internet era.
This cold spell will temporarily slow US economic growth. It may also delay the next rise in long-dated Treasury Bond yields. It will not help the previously high-flying US stock market unless it slows the Fed’s tapering programme announced after last month’s meeting. Meanwhile, this 7-day weather map for the continental USA shows that the ‘polar vortex’ will dissipate to more normal conditions as the week progresses.Back to top