Economy changes like the weather
A woman takes in the sunshine while reading in Central Park in New York City. A new survey says two-thirds of Wall Street economists think the good weather is making things look better than they really are.
Kai Ryssdal: It's 60-ish here in L.A. today. A little bit on the cool side, but it's gonna warm up a bit tomorrow and over the weekend. Unseasonably warm, actually. That's been the pattern in much of the country this winter. And believe it or not the temperate climate just might be giving us a little too much confidence in our economy right now. I say that because a survey from Blue Chip Financial Forecasts says two-thirds of Wall Street economists think all the good weather is making things look better than they really are.
Marketplace's Sarah Gardner has the story.
Sarah Gardner: These economists don’t want to rain on anybody’s parade, but they say the drier and warmer winter in recent months has, "led to an overstatement of the economy’s underlying strength." I called economist Ellen Zentner at Nomura Securities in New York to ask why. But first, how’s the weather?
Ellen Zentner: Oh, it’s dreary as usual. But it is warmer than usual today.
Zentner says milder weather has stirred up economic activity that’s normally rather ho-hum in winter time, like shopping.
Zentner: To a certain extent, milder weather makes us more upbeat. We go out and shop more. Certainly the malls raked it in and we actually saw the malls gain share on Internet shopping.
Not to mention new construction, says Wells Fargo economist Anika Khan. She’s in Charlotte where it’s a balmy 79 today.
Anika Khan: Housing starts were exceptionally strong for the month of January.
Economist Mark Zandi, in Philadelphia at 51 and cloudy, even attributes stronger home sales, in part, to the recent weather.
Mark Zandi: Probably a bit stronger than otherwise would be the case. Even the jobs data has had a firmer tone to it in part because of the weather.
But Zandi says, in the end, this is a good-weather spike.
Zandi: And so we just have to take it with a little bit of a grain of salt that once the weather becomes more seasonal, things are going to go back to normal.
Normal, as in a steady, but slow economic recovery.
In Los Angeles at 61 and sunny, I’m Sarah Gardner for Marketplace.