It seems that all of the bad economic news that has come out in the last six months has been blamed on the weather:
And finally, yesterday it was reported that the U.S. economy is stalling because of……wait for it……the weather!!!
WASHINGTON (Reuters) – The U.S. economy barely grew in the first quarter as the severe winter hampered exports and led businesses to curtail investment spending…
I can’t wait for the election season to start, just to see which Democrat politician is going to use the phrase “it’s the weather, stupid!”
Gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, the Commerce Department said on Wednesday.
“This quarter was impacted heavily by the weather. Growth is down, but not out, not by a long shot, and we look for it to quicken later on in the spring,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.
“Our bet is that the weakness we saw in the first quarter is more transitory than fundamental, with a heavy dose of weather distortions,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.
Economists estimate severe weather could have chopped off as much as 1.4 percentage points from GDP growth. The government, however, gave no details on the impact of the weather.
Even Peter Schiff wrote about this blame game:
Over the past few weeks, I have seen just about every weak piece of economic news being blamed on the weather. First it was lackluster retail sales that were chalked up to consumers being unable or unwilling to make it to the mall. (This managed to ignore the fact that online sales were similarly weak – which would be unexpected for a nation of snowed in consumers). Then came the weak auto sales that were ascribed to similarly holed up potential car buyers. However, this ignores that while GM and Chrysler sales were way down, sales for luxury cars like BMW, Mercedes and Maserati, surged to record high levels (more on that later). No one offered a reason why wealthier motorists were able to brave the cold. A number of other data points, such as lower GDP, productivity, ISM and factory orders were also ascribed to the elements.
Analysts also blamed the weather for weak housing sales and mortgage applications, which both hit multi-year lows. The idea being that hibernating buyers could not get to real estate open houses or to the bank to process loans. This idea ignores the fact that the weakest home sales over the last few months have come from the states west of the Rockies, where temperatures have been above average.
Of course the biggest weakness ascribed to the snow and ice has been the very disappointing employment reports over the last few months. Analysts faced a very difficult task in squaring these reports, which showed fewer than 187,000 new jobs created in December and January combined, with the accepted narrative that the recovery was firmly underway and that the economy was no longer dependent on the Fed’s monetary support.
But it might not be the weather after all:
RBC finds only a mere 19% of those surveyed “spent less” due to the weather – and 27% spent more!
Mr. Schiff weighs in again:
In truth, economic activity persists in good weather and bad. Winter is largely predictable. It comes around once a year, basically on schedule. Consumers are used to the patterns and know how to deal with them. But don’t tell this to today’s economists.
A much more plausible explanation to me is that the economy has been weak recently because it is weak fundamentally.
Of course, PhD economists will tell you that the damage done by the thunderstorms this past week is a good thing, because it will stimulate the economy when things are rebuilt.
Why is anyone listening to economists anymore? They’re just like Milli Vanilli: they look
and sound good, but it’s all a sham.
Milli Vanilli became one of the most popular pop acts in the late 1980s and early 1990s. Their success turned to infamy when the Grammy award was withdrawn after Los Angeles Times author Chuck Philips revealed that lead vocals on the record were not the voices of Morvan and Pilatus. – From the Wikipedia link above