As the end of daylight saving time approaches along with the annual admonition to “fall back” millions of Americans will gain an extra hour of sleep when clocks are adjusted from 2 a.m. to 1 a.m. Sunday.
Turns out that extra hour of sleep may have a detrimental effect on the economy overall – to the
The Economy Takes A ‘Fall’
Fall marks the end of daylight saving time, which originated as an energy-saving tool during World War I. Fall is also when that extra hour of daylight gained in the spring shifts to the beginning of the day, wiping out economic gains from the additional daylight in spring and summer.
Breaking Down The Damage
The November ‘fall’ was most pronounced at grocery stores, gasoline stations and other retailers. Most of the reduction took place during the week rather than on the weekend, likely a reflection of the fact consumers were less willing to stop and shop on the way home from work when it was dark.
While the JPMorgan Chase study was not ‘store’ specific, major grocers in Los Angeles include Sprouts Farmers Market Inc. (TSX:
Spring And Stocks
On the flip side, when daylight saving time begins in the spring, adding an hour of daylight produces a slight increase in traffic and spending at the aforementioned retailers but a drop off in the stock market.
For example, since 2007, the S&P 500 dropped an average of 0.24 percent after the weekend when ‘spring forward’ took place. Anecdotally, many researchers proposed that much of the drop was due to traders’ lack of sleep.
Whatever the cause, the impact has been significant, accounting for a one-day loss of $31 billion on the NYSE, AMEX and Nasdaq exchanges.
The Long-Term Outlook
Despite the overall economic and market losses, there is
Thanks to support from the U.S. Chamber of Commerce and pressure from the golfing, tourism and recreational industries that extra hour of daylight during 8 months of the year translates to more economic opportunity for those sectors.
Truth be told, most retail establishments love daylight saving time and that extra hour of opportunity because it is good for their bottom line.