- POSTED: 18 Feb 2014 16:43
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As snowstorms continue to batter large parts of the United States, economists are divided on how big an impact the weather is having on the financial sector.
NEW YORK: As snowstorms continue to batter large parts of the United States, economists are divided on how big an impact the weather is having on the financial sector.
With store closures, missed work days, general disruptions and larger gas bills due to the inclement weather that has hit much of the United States, some economists predict a 0.3-per cent dip in GDP growth for this quarter.
Carroll Olson, director of Rockefeller Ice Rink, said: “The cold definitely affects us. (Business) is definitely quieter.”
Following some soft economic data in January, economists differ on how much the cold is to blame.
Retail sales fell 0.4 per cent in January, missing investor expectations as did job numbers, with many citing the weather as a probable cause.
For some experts though, it is not purely down to the cold.
Following a strong 2013 for Wall Street, some believe that a slight correction in the market is also a factor to be considered.
Steve Blitz, chief economist at ITG, said: “The economy was slowing a little from the pace that was set late summer, early fall, but obviously the slowdown got exacerbated by the weather.”
By putting off shoppers and slowing down manufacturing, the weather certainly played a part in the recent disappointing economic data.
Investors will now see whether the economy rebounds when the weather improves.
Mr Blitz said: “How much of what was lost comes back, and a good part of it will. You're not buying a car because it's too cold but you still need a car so instead of buying it in January or February, you'll buy it in March or April.”
For investors, they hope economic data will pick up when the snow begins to clear and the US economy can get into full swing.