'Polar vortex' disruption to cost US economy $5bn

Thursday, January 9, 2014

'Polar vortex' disruption to cost US economy $5bn

Plunge in temperatures could cost US economy $5bn in lost revenue and shave the equivalent of 0.2pc off first quarter GDP

Arctic freeze is locking down businesses and the economy across America Photo: KEN STEVENS/AP

By Katherine Rushton, US Business Editor

1:48PM GMT 08 Jan 2014

The American big freeze has put an icy chill on business, as flights are cancelled and people cocoon themselves at home instead of going to the shops or to work.

The cold snap, which broke records as temperatures plunged below zero in all 50 states on Tuesday, could cost around $5bn, and shave the equivalent of 0.2pc a year off US GDP in the first quarter.

Evan Gold, senior vice president of Planalytics, a company which tracks weather for businesses, said that the cold snap would be short-lived, but that the cost would reach $5bn because of the sheer number of people affected.

"A similar situation in 2010 lasted a week, with back-to-back storms with snow and ice. We calculated that cost $25 billion to $30 billion. But that one lingered. This one is just very cold, so it should be a two- or three-day event,” he said.

Some 187m people in the Eastern two-thirds of the country faced extremely low temperatures on Tuesday, in what became dubbed the “polar vortex”. New York saw the mercury drop more than it has done in over a century, but the lowest temperature was reported at Embarrass, Minnesota, where the thermometer fell to -35F (-37C). Once the wind chill factor was taken into account, the temperature was as low as -45F (-43C).

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