The number of “snow hurricanes” that have hit the mid-Atlantic states and Northeastern US must be a National Weather Service record. Much of the East Coast is under assault again and will be for most of the weekend.
Storms have not spared the South, Midwest, and Plains states. The West coast has been least affected by bad weather, but that is only about a quarter of the Continental US territory.
GDP, retail activity, and home sales are all likely to suffer as badly in February as they did in January. It is impossible to predict whether the economic activity that might have occurred in the first two months of the year will transfer into March or not, but some of its is likely to have been completely lost.
Data from Washington and private research companies have shown a rapid slowing of economic growth in the US but have not said much about the root causes. It is convenient to blame the problem on snow, rain, and sleet. The real culprit may be that consumers are still concerned about their jobs, falling home values, and trouble convincing banks that they are credit worthy enough to get a loan.
March GDP should be 5% or 6% higher if pent-up consumer and housing demand were simply due to people being snowed in or flooded out. If March is not especially strong economically, it means that the first quarter was troubled and the second is not likely to be better.
Douglas A. McIntyre
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