What Happened in January?

Mar 12, 2024 | Finconomics 101, No Bull Economics

January Weather Post Banner

How many times did we hear corporate management teams blame bad weather for their weak performance during January? The weather was fine here in the Southeast, so surely it was terrible in the rest of the country? We looked at the nation’s weather averages during January & things didn’t look too bad to us. There must have been something else going on here…  

Comments

  • According to the NOAA, January was mildly warm (ranked 48/130 years), but rather wet (10/130 years). Yes, there were some isolated storms around the country, but generally, the weather was not too bad.

Divisonal Average Temp & Precipitation Rank Graph
  • We thought it was telling that ARCO’s (sixth largest convenience store operator) management said they were not going to blame the weather for their weak results in January.
  • Further, ARCO provided an important clue for us to consider about why retail results have been suffering – miles driven are down high-single-digits. EVs may have something to do with the overall national decline, but probably not in ARCO’s rural, lower-income markets where the decline in miles driven just slightly exceeded the national average.
  • So, people are driving less, but why? Does the fact that they have fewer places to go imply that they have less money to spend? Certainly, to some extent, however, lower-income households are doing pretty well as discussed in this post according to government data.
  • Our take? The start of 2024 marks a year of expected tumult anticipated by most consumers. Crazy election? Check. Possible start of WW3? Check. New social contract incorporating a nation without borders? Check. Crushing interest rates & lack of affordable housing? Check. Are we missing anything??
  • What do insecure consumers do? They hunker down & hoard…
  • As we have been saying for some time, the country just needs to get through 2024 & with some blessing from on high we can get to the serious business of rebuilding our lives, society & the economy post-covid. Yes, it takes that long to recover from such an attack, but we can heal with the correct leadership. We don’t need a “great reset”, just some commonsense fixes for a system that is perhaps the best ever conceived.

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