The Impact of the US Winter on the Economy

Generali

http://blogs.wsj.com/economics/2016/01/23/blizzard-heres-the-weather-effect-on-the-economy-youre-not-thinking-of/

Weather often takes the blame for denting economic output. It rarely gets credit for helping it along. Indeed, a severe winter storm blanketing much of the East Coast will likely affect everything from hours worked to utility output to retails sales and restaurant traffic. More often overlooked is the case of mild weather. Recent research from the Brookings Institution shows just how helpful it can be.


“For the month of December, higher-than-average temperatures appear to have had a significant effect on jobs, with warmer weather likely boosting construction employment above its seasonal norms,” said Jonathan Wright, a professor at Johns Hopkins University.

Continues...

TL;DR version: weather has a complex interaction with the economy but warmer winters seem to lead to greater output (and warmer summers to less perhaps...?).

Despite the storm, the US is having a very mild winter. Maybe it's a bit early to bet against more Fed rate rises despite market turmoil. After all the S&P isn't down nearly as much as Asian markets and the Fed has plenty of history of believing that their monetary policy is not their problem beyond their borders.

michaels

Was it last year that a particularly bad US winter saw really (misleadingly) low growth in Q1?

I think the consumption effect of mild winters in the UK is overlooked - we probably spent £50 less on gas just in December because it was so mild - multiply that over 15m households and you are talking a big boost to disposable income.

Generali

michaels wrote: »

Was it last year that a particularly bad US winter saw really (misleadingly) low growth in Q1?

I think the consumption effect of mild winters in the UK is overlooked - we probably spent £50 less on gas just in December because it was so mild - multiply that over 15m households and you are talking a big boost to disposable income.

Apparently spending less on fuel is a crisis not a boon. According to AEP it's no. 148 on his Big List of Things that will Destroy the Economy of the UK.

Still it's something I find interesting even if AEP doesn't; the little ebbs and flows of GDP from things like weather, the changing date of Easter or the death of the Queen Mum (God Bless Her).