It’s a rainy day outside. Your plans to go to the smoothie shop, restart your gym membership, and drive to the beach after you go shopping at the Grove in Beverly Hills have been canceled. You know that California weather tends to be dry and hot for the most part, so you push off your plans to have a rainy-day in. This day consists of watching movies on your Netflix account and cooking with leftovers around the house. This day is a good day to finally pick up that book you bought two years ago about success. One might not think these very actions serve any impact to the surrounding companies and people. In fact, it does. You, in addition to all the other people that decided to stay in because of this spontaneous rain in sunny California, would be reducing your contribution to the GDP and the economic growth in general. Different climates make consumer behavior change.

Weather plays a substantial role in the health of certain markets and therefore influencing the economy. Weather relates to the condition of the atmosphere with respect to temperature, humidity, etc. Different temperatures call for different demands, like the need for winter clothes and the popularity of comfort foods increases when winter is around the corner. Different humidity conditions affect the growth of certain crops, the sales of personal care products, and tourism revenue. In regions where the weather changes drastically, the revenue in many businesses may thrive or cripple. Seasonal businesses can include fresh produce, clothing, tourism, etc.

Blueberries grow in the summer season, “typically grown in humid and northern climates that have winter chills, mild summers, and low-pH or acidic soils.” These conditions limit the places where blueberries can grow. In cases of natural disasters and global warming, the value of the crop can be changed.  

For example, in September 2017, Hurricane Irma destroyed more than 50% of orange crop in Florida. With less supply and now more demand, fresh squeezed orange juice spiked in price. With a reduced harvest, alternatives, such as frozen concentrated orange juice, became more expensive, as well. Based on USA Today, “orange juice drinkers pay as much as $2.30 more for a gallon of orange juice as a result of the broad swatch that Irma cut through Florida’s citrus crop.”

Based on Everyday Health, individuals eat more in the winter, which would yield to an increased demand for food. During the winter time, there is an apparent rise in sales for comfort foods, such as meatballs, lasagna, cookies, and pork chops. 

https://www.washingtonpost.com/news/wonk/wp/2015/11/25/the-hidden-ways-weather-determines-what-you-buy/?noredirect=on&utm_term=.cbabc329b7cc

Due to the influence weather has on economic activity, technology has found a way to monitor weather in efforts to capitalize on marketing and advertising. McDonald’s, a fast food chain, promotes coffee sales in cold areas and McFlurry sales in sunny areas. With access to current weather, companies can adjust campaigns to gain more impressions and attention. 

Economic indicators such as unemployment rates, the U6 number and the consumer price index are key insights into analyzing the economy. Experts are constantly studying what is going on in both the global economy and economies of specific countries in order to understand current economic states. This allows individuals to make educated predictions about the future of these economies. Often the most important indicators to look at are not those providing data of what is happening now or the spending that is taking place currently, but rather indicators that forecast future trends. These indicators are called leading indicators – one being consumer confidence.

Consumer confidence measures how optimistic consumers are feeling about the current state of the economy, as well as their own personal financial situation. The index is based on a monthly survey of thousands of United States households. The survey is put on by The Conference Board and consists of five questions surrounding topics like current business conditions, business conditions for the next six months, current employment conditions, employment conditions for the next six months and total family income for the next six months. Opinion on current conditions makes up around 40 percent of the index and expectation about the future makes up around 60 percent. The primary focus on the future is what categorizes consumer confidence as a leading indicator, as opposed to a trailing indicator like retail sales.

While this economic indicator specifies consumer sentiment, it has the powerful ability predict consumer spending. Consumer confidence will directly point to whether individuals are likely to go to the mall on the weekend to do some leisurely shopping, or if they will only be focusing on fulfilling only their basic needs. In turn, it aids experts and other consumers in understanding where the general population feels the economy is going – arguably the most important insight into a nation.

Normality of consumer confidence is measured at 100. In August 2018, consumer confidence in the United States was the lowest in almost a year, falling from 97.9 in July to 95.3. A graph tracking consumer confidence in the U.S. over the last year is shown below:

Experts are estimating the low reading is mainly due to less favorable perceptions of market prices. Additionally, consumers reported viewing vehicle and home-buying conditions as less favorable. There is evidence that consumers have become very sensitive to even low inflation rates, as they were anticipating a 2.9 % inflation rate ahead of August.

This fall in consumer confidence will likely reflect in next month’s retail sales and personal spending numbers. Aware of the effect of this economic indicator, corporations as well as politicians utilize consumer confidence to anticipate whether people will be likely spending more or saving more in upcoming months. Businesses are able to adjust operational plans as a result of the indicator, either increasing or decreasing volume production of their product. Additionally, the government can adjust their expected tax revenue based on consumer spending.

It is essential to pay attention to consumer confidence. It allows consumers and experts in economics to make proactive decisions regarding the economy. The economic indicator also provides valuable insight into the certainty citizen’s feel about their nation.

Despite a previously rocky relationship between the Mexican government and the Trump administration, new trading deals have been discussed that seem to satisfy both countries. Trump has had a difficult relationship with Mexican President Enrique Peña Nieto due to Trump’s demands that Mexico pay for a border wall, yet it appears that negotiations have been made to continue a cordial trade relationship with Mexico. 

President Trump has been openly opposed to the North American Free Trade Agreement (NAFTA) and so he is determined to create new trade deals during his presidency. In an effort to achieve this goal, he has negotiated a new trade agreement with Mexico and is in the process of negotiating with Canada. Due to the complicated and difficult relationship between the United States and Mexico, Canada has been waiting for the issues between the two countries to be sorted out before getting involved in the new trade agreement.

In this new trade agreement, Trump has addressed his fear for loss of American manufacturing jobs. According to Charles Wallace, in Forbes, “the agreement provides that 85 percent of parts in the car must be made in North America to be considered for tariff-free imports. The Trump Administration has been concerned that car parts from Europe and Asia, especially china, were being assembled in car in Mexico and then imported for sale in the United States.” This new trade agreement gives Mexico an incentive to use America car parts because it saves them money on tariffs. 

President Trump is always very confident about his decisions, yet some of his plans for this new trade agreement may not be possible. Trump wants to get rid of NAFTA completely and create his new trade agreement as the sole agreement between the US, Canada, and Mexico. However, it is unclear whether this form of action can be implemented or will be allowed by Congress. He also feels so strongly about the trade agreement with Mexico that he has contemplated the idea of following through with the agreement even if Canada does not get involved. This is not a mind set that is agreed on by all members involved, though. Mexico has made it clear that the trade agreement must involve Canada and the US Congress has backed this opinion. Because of this, the trade agreement will not be complete until negotiations have successfully been made with Canada. There is, additionally, a time limit for the final negotiations to be made because López Obrador will likely attempt to make changes if the treaty is not completed before he assumes the presidency.

Currently, both the United States and Mexico stand to benefit from this trade agreement and the ability to negotiate between the two countries is a success in itself. However, there are still uncertainties about the future of the agreement and its success.