The U.S. economy ground nearly to a halt in the first three months of the year, according to government data released Wednesday morning, as exports plunged and severe winter weather helped keep consumers indoors.
The gross domestic product grew between January and March at an annualized rate of 0.2 percent, the U.S. Commerce Department said, adding to the picture of an economy braking sharply after accelerating for much of last year. The pace fell well shy of the 1 percent mark anticipated by analysts and marked the weakest quarter in a year.
The economy had expanded at a rate of 2.2 percent in the final three months of 2014 and at a rate of 2.4 percent for the year.
The good old day, in other words.
[T]he tie between weather and economic performance is often overstated, according to the small number of experts who’ve searched for a correlation. In fact, the data shows that only a few slices of the economy — manufacturing and construction, namely — can be hurt by a brutal winter. Retail sales, to a much lesser extent, can also feel a pinch. But weather alone won’t bring a humming economy to a halt.
If you look for trends between national weather and economic performance, you’ll find a lot of noise. In the coldest January-March period of the last 30 years (1985), the gross domestic product in the same time went up by 4.0 percent. In the snowiest period (1998), growth was 4.0 as well. In the least snowy quarter (1988), GDP grew by 2.3 percent. In the second least-snowy quarter (2009), the GDP shrank by 5.4 percent.
In a paper released recently by the Federal Reserve Bank of Chicago, two researchers concluded that the effect of weather “is not very large.” The effect, they added, is certainly not large enough to explain what happened a year ago, when a 2.2 percent contraction in the quarter lasting from January through March coincided with a particularly brutal winter.
Yes, remember that winter? It was actually a lot like this one.
I remember. I also remember that the second and third quarters of last year showed vigorous growth (above 4%). So did the third and fourth quarters of 2013. Yet it can’t be sustained. In between are quarters of meager growth or even contraction. We’re still in a (technical) expansion—have been since June 2009—but the growth can’t be sustained. Why do you think that is? Can’t still be Bush’s fault.
In fact, after a 3.9% growth in the 4th quarter of 2009, Bush should have been given credit (he had been president until only nine months previously) or excused from any further criticism. The economy repeated the 3.9% performance two quarters later (with a 1.7% growth in between). That’s a recovery. But it’s topped 3% only five out of 19 quarters since. Four of those robust quarters have occurred in the last seven. And still we fall to 0.2%.
I repeat myself to exhaustion: we have the recovery we’ve earned. Thanks, Obama.