Severe Winter Weather May Cost U.S. Economy as Much as $50 Billion, by CNBC
Severe winter weather may have cost the nation’s economy as much $50 billion and 76,000 jobs this season, according to a CNBC Fed Survey of 19 Wall Street economists, strategists and fund managers. Survey respondents put the total weather impact at about a third of a percentage point of the $16 trillion U.S. economy.
The biggest hit to the economy comes this quarter, when “survey respondents estimated that bone-chilling cold and driving snow shaved about four-tenths of a point off total growth, including lost work hours and lost sales.” That's on top of a 0.16 percent loss in the third quarter of 2013.
Severe weather throughout much of the nation appears to be at least partially responsible for a big decline in January retail sales that featured plunging auto, furniture and department store sales. On the other hand, a big increase in building and garden supply sales may have been the result of Americans buying shovels, salt and snow blowers.
The weather also appears to be hurting the job market. Survey respondents estimated that December, January and February payrolls were about 80,000 jobs lighter because of the weather, with 32,000 fewer jobs in December, 25,000 in January and 19,000 in February. But respondents admitted that the weather was responsible for only about 45 percent of recent economic weakness. Economist Diane Swonk at Mesirow Financial said that "weather losses are exacerbating the weakness associated with an overhang of inventories at the start of the year," while John Lonski at Moody's said that "higher bond yields, sluggish employment income and slower than expected spending growth in emerging market countries" are adding to weather woes.
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