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This week's storms in the North — or, rather, in the South and the Northeast were the latest punch to businesses, retailers, government offices and employees coping with a tough winter.
Jeffrey Brown looks at the economic impact.
It's just the middle of February and many states have seen more than their usual share of snow days. Even in the Midwest and Plains states, where harsh winters are normal, there have been weeks where subzero temperatures have frozen activity.
Mark Zandi is watching and assessing the fallout as chief economist of Moody's Analytics.
Well, Mark, generally, first, what kind of negative economic impact is the bad winter having so far?
MARK ZANDI, Moody’s Analytics:
Well, it's really hurt.
And it's been really cold since early December, and now we're getting a string of storms that are really disrupting economic activity. You can see it best in the job market. We lost roughly 50,000 jobs in the month of December because of the atypical weather, not quite that in January. And given what happened this last week, I expect we will lose 75,000 to 100,000 jobs in the month of February.
So, it's really hurting the economy at this point.
And this goes beyond what's normally accounted for already, the so-called seasonally adjusted type of assessment?
Yes, that's exactly right.
So, you know, obviously, in the wintertime, it's cold and you don't see as much economic activity normally. But we account for that. Economists account for that. The government statisticians account for that in their data. They seasonally adjust the data.
But, obviously, the weather we have been getting is way outside of anything we see normally, and thus the impact on the economy is not typical. It's much bigger than normal in the winter months.
Break it down a little bit by sectors or types of businesses.
Well, you know, it's really — it's hurt the auto industry a lot. Auto sales are way off. We got some industrial production data and auto production is down as a result. Anything, obviously, related to construction, housing — the housing recovery is just in its infancy, and this has put it back on its feet.
Retailing hit really hard, restaurants, travel, the airlines. If you move anything around, transportation, distribution, warehousing, that is stuff moving around, that gets disrupted, so widespread disruption. And I think one key thing is, since a lot of people in most of the country is having to spend a lot more just to heat their homes, they have a lot less to spend on everything else, and it hurts everybody else.
We should mention, I guess, today is Valentine's Day, so the candy and flower industries?
Yes, you know, getting those cut flowers to the stores I'm sure is a little bit difficult where I'm from, here in Philadelphia.
And just looking at the site, I went to buy wife a Valentine's card and it was — it as crowded as it normally is. I'm sure Valentine's is being disrupted as well.
How about regionally? Because, of course, one of the phenomena has been — hit the — place like the Southeast particularly hard.
Yes, and it's not — obviously, the Southeast generally doesn't get this weather. I mean, we have had ice storms in Dallas and parts of Louisiana. Atlanta and Charlotte were basically — been basically shut down for a good part of the last few weeks.
And so it's been incredibly disruptive there. The Northeast has been real — hit really hard. Of course, in the Northeast, we're more used to this, we're prepared for it, but this is beyond the pale. Lots of people have lost power. And that's affected their ability to do their work.
Even the Midwest, as you mentioned, it's been brutally cold, so cold, that it has cut down on construction activity in that part of the country, which, normally, you know, they can weather a lot of weather. So — and it's also important to point out, it's not the winter, but we have got a big drought in California which is also having an impact.
The — just finally, within the larger picture, just to put it in a larger context, Mark, the economy still struggling to get a foothold, right? So how do you look at what is going on in these months as affecting that?
Well, Jeff, you know, I — this is temporary. I mean, we will overcome this once we get more typical weather as we move into March and April. Things will bounce back.
You can't get everything back. You can't get those airline trips back, but — and those cut flowers for Valentine's back, but we will get most of it back and the economy will get back on track. It's just, obviously, very discouraging.
The recovery is now four-and-a-half years old, and it really hasn't kicked into high gear. I thought that we would late last year, but the winter has really delayed things. But, ultimately, this economy is moving in the right direction, and I think once we get more typical weather, we will see that.
All right, Mark Zandi, thanks so much.
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