Weather makes economic data hazy
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BOB MOON:We made it to Friday, this 26th of February, which is no small feat given the harsh weather from coast to coast. From winter’s third strike in the east, to new flash flood worries from yet another storm moving in here in soggy L.A. It’s even making life tougher on economists, who make a living deciphering the numbers, because the weather is having an increasing impact on the economy’s performance.
Marketplace’s John Dismdale explains.
John Dimsdale: As the guy who keeps tabs on housing numbers for IHS Global Insight, Pat Newport is a big fan of the National Climatic Data Center.
Pat Newport: Since it’s my job, I look at their site every month.
And Newport says it’s been a weird winter, weather-wise.
Newport: October was the third coolest and the wettest October that we’ve had in the 115 years that the government has been tracking the numbers. November was the third warmest and eighteenth driest. Then December was fourteenth coldest and eleventh wettest. Now we’re in February, and we’re having three winter storms.
When it’s too wet or cold to build homes, construction jobs are put off.
Newport: I don’t think we’re going to get a good reading on housing, for maybe not until April.
At which time Newport predicts a burst of hiring to meet a backlog of demand for new houses. Meanwhile, transportation is disrupted, shoppers stay home and local governments are slapped with clean-up costs. Fed Chairman Ben Bernanke was asked about the weather at a congressional hearing yesterday. He doesn’t expect any long-term effects on the economy. But he is looking for a temporary spike in unemployment.
Ben Bernanke: So we’ll have to be particularly careful about not over-interpreting the data that we receive for January.
Some analysts say if the economy is this susceptible to changes in the weather, the recovery is on very thin ice. And the murky data could make the Fed’s job of spotting economic trends more difficult — just as it’s trying to decide when to unwind its easy money policies.
In Washington, I’m John Dimsdale for Marketplace.
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