What’s Spookier: Hurricane Milton or Halloween Spending?

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Maybe eventually I’ll get over it because I’m fairly new at writing about the economy, but examining a natural disaster from a purely monetary point of view seems rather crass. Even after watching the news coverage, I still can’t fathom the personal and community-wide devastation those in Florida are currently facing.

Economic Impact of Hurricane Milton

Milton is estimated to reduce U.S. GDP growth in this latter part of 2024 by 0.2 to 0.4 percentage points. Which means a loss of between 53.8 billion dollars and 107.6 billion dollars.

You could build highways with that kind of cash that span half the distance around the earth. You build a stack of a hundred-dollar bills roughly 230 miles high, about the equivalent of flying from New York to Philadelphia and back. At the top end of the scale, you’re staring at a stack of cash 450 miles high, a flight from New York to Chicago and back.

The Florida tourism sector is probably gone. The construction industry, which has benefited from emergency buying, will likely slow as new home sales decline. Retail might see a brief uptick in emergency purchases, but this will be followed by significantly reduced consumer spending in the affect areas. Additionally, the energy section faces shutdowns in oil extraction and power outages. Florida will also experience severe labor market disruptions. Many workers will not be counted in employment data due to evacuations or inability to work. Hurricane Helene was expected to cause an estimated job loss of 40,000 to 50,000.

WHERE TO DONATE

World Central Kitchen is working in locations throughout Florida to provide survivors with water and free hot meals.
The American Red Cross is providing shelter, food and relief supplies.
All Hands and Hearts has deployed teams to Pasco County and Sarasota to begin immediate relief efforts.
Direct Relief is supplying emergency medical aid and providing financial support to local medical centers.
Save the Children focuses on providing emergency supplies to children and getting them back to learning after disaster hits.
Americares is supporting its 110 partner clinics in affected areas.
Heart to Heart is partnering with more than 70 organizations on the ground to provide essential medical supplies.

In light of Helene and Milton, I thought it apropos to post to the blog last month’s real estate market report on climate change.

Inflation Challenges

On top of Florida weather, we are also still struggling with inflation. Thank you transportation costs and insurance rates. I saw eggs at Walmart yesterday for over six dollars.

And let’s not just focus on eggs. Halloween candy prices are experiencing an increase, yet consumers are still splurging with many incorporating candy purchases into their grocery budgets this month. The latest figures reveal that prices for sugar and sweets have risen by 0.8% annually, with sugar and sugar substitutes seeing a notable 3.3% increase.

Interestingly, on a monthly basis, candy prices have dipped by 0.7%. However, despite some signs of relief from the Consumer Price Index (CPI), rising cocoa prices could pose further challenges for candy pricing, with year-to-date cocoa futures having nearly doubled due to the El Niño climate pattern adversely affecting cocoa production. The 2023-2024 crop year has seen a significant drop in crop production by 14.2%, creating a 405,000 metric ton deficit and a total global cocoa supply shortfall of 462,000 metric tons, according to David Branch of Wells Fargo.

Consumer Behavior Trends

Uhm. So if a 100 kids knock on my door this Halloween, 15 of them will be Charlie Browning it.

To cope with these challenges, candy manufacturers have resorted to using more fillers in their products, and introducing various shapes of candy or gummy options to keep prices manageable.

Nevertheless, consumers are projected to spend a staggering $3.5 billion on candy this year, as reported by the National Retail Federation. Andy Keenan from Advantage Solutions notes that even amid tightening budgets and inflation fears, consumers are drawn to the nostalgic aspects of Halloween. Or maybe we’re just tired and want some chocolate.

A recent survey indicated that about 70% of consumers plan to wait until the week of Halloween to snag the best deals, driven by the belief that purchasing just before the holiday will yield better prices, although retailers are already promoting discounts and deals earlier than in previous years, according to YahooFinance.

On a personal note, I bought a bag of Kit Kats, Rolos, Reese Peanut Butter Cups, Whoppers, and plan boring Hershey chocolate minis. The bag is more than half gone. So, buying ahead of Halloween might not actually be the savings you’re looking for.

Labor Market Discontent

Frustrated by inflation across the board—not just with Halloween candy prices, union members at various companies, including Boeing, AT&T, and Textron, are increasingly rejecting contracts proposed by their leadership. A striking example occurred at Boeing, where 94% of machinists voted against a leadership-backed deal that promised a 25% wage increase over four years, marking a historic rejection of union recommendations. Despite union members typically earning more than non-union workers, rising costs have fueled dissatisfaction, prompting a wave of strikes as employees demand better compensation. This discontent reflects a broader trend of workers pushing back against leadership, seeking fairer contracts amid a tightening labor market and increased awareness of successful negotiations by unions like the UAW. You can read more about union members voting no over at MSN.com.

Job Market Insights

Additionally, despite the U.S. adding 254,000 jobs in September and the national unemployment rate standing at 4.1%, many individuals, like Jeff Huard—a recently laid-off manufacturing worker—and Janet Aranda, a newly graduated accountant, find themselves navigating a challenging job landscape characterized by stagnant wages and rising living costs. At Saturday’s Mall of New Hampshire job fair, where over 60 companies sought to fill various positions, candidates of all backgrounds, from young graduates like J.P. Arico to seasoned professionals, were actively looking for opportunities.

Local Business Updates

In other economic news, Big Lots is closing 2 New Hampshire stores—the 96 Daniel Webster Highway location in Belmont and the Rochester store at 96 Milton Road.

These two store closings are among the full 300 shuttering shops, as they filed for bankruptcy protection in September. According to an article in SeacoastOnline, the retailer says their store closings is due to “macroeconomic challenges.” Big fancy words for high interest rates and inflation. Big Lots inventory comes from overstock, discontinued products, and closeout situations, so its products (sometimes) lack consistency in quality. I bought a kitchen table 9 years ago, still standing strong, but the chairs are falling apart pretty quickly.

Eighty Eight Coffee Co., a BIPOC-owned family business in Manchester, NH, faces imminent closure due to the city’s use of eminent domain for the Cemetery Brook Drain Tunnel Project. The project aims to prevent sewage overflow into the Merrimack River but requires the property at 124 Queen City Avenue, where the café operates.

Founded in 2015, the café has become a community hub known for its culturally inspired menu and quality coffee. The family, who have owned the property since 1999, is struggling to negotiate with the city, receiving offers that do not adequately compensate for relocation. With a deadline of October 18 to accept the city’s final offer, they have garnered community support, urging patrons to advocate for their cause and spread the word about the situation. As they navigate this challenging period, the family continues to serve their customers while dealing with the legal and financial ramifications of the impending closure.

I think one of my main questions that came out of Amara Phelp’s article about Eighty-Eight Coffee, is that I wondered why if there are other vacant lots nearby, why is Manchester shutting effectively shutting down a local business?

Stock Market Performance

Hey! On October 11, the stock market did really well. The S&P 500 went up by 34.98 points, which is a 0.61% increase, and ended at 5,815.03. The Dow 30 did even better, rising by 409.74 points (a 0.97% increase), finishing at 42,863.86. The NASDAQ also grew, going up by 60.89 points (a 0.33% increase), ending the day at 18,342.94. Basically, all the main stock market indicators showed some solid (once again) record gains.

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