Weather conditions are the perfect deflection factor when the recent trend is not your friend. The U.S. government and Wall Street are extremely well versed in pandering to the citizens of this country as they know all too well that most people do not want to be bothered with the details so if the news is bad BUT it is due to weather, than this too shall change, no worry.
On 2/11/10, MarketWatch set the stage:
Headline: Big snow could fog up economic view, Payrolls likely to fall in February, rebound in March -- all because of storms.
The massive snow storms that blasted the East Coast this week could reverberate in the economic data for a couple of months, clouding any assessment of the health of the economy.
The snow itself disrupted economic activity in a major, but mostly temporary way. Tens of millions of people couldn't get to work, but most of what they were supposed to do will get done eventually.
Tens of millions of people couldn't get to the stores, but eventually they'll buy their gallon of milk, their new video game, and their spring clothing. They'll get around to seeing that movie, and they'll probably reschedule that business meeting.
Some spending increased because of the storms. More money was spent to remove snow, and to repair structures damaged by the ice and snow. Sales of snow shovels and parkas increased. Snow can be a stimulus.
On the other hand, some activity was lost forever. "The losses are real," said Mark Vitner, an economist for Wells Fargo Securities. People who were snowed in won't buy an extra lunch when they get back to work, and they won't park their car twice.
In the past, major storms that have hit during the survey week have had a major impact on employment, only to see a reversal the next month. Economist Joe LaVorgna of Deutsche Bank figures a snow storm in the survey week lowers payrolls by an average of 90,000 compared with the trend line.
For instance, payrolls fell by a seasonally adjusted 51,000 in March 1993 when the "storm of the century" lashed the Midwest and East during the survey week. Employment was strong before and after the storm. In February before the storm, payrolls had risen by 309,000; in April, payrolls rose by 250,000. The average workweek fell by 0.6% in March.
The 1993 storm also had an impact on seasonally adjusted retail sales, which sank 0.7% in March, only to rise 2.2% in April. Housing starts were also bruised by the 1993 storm, falling more than 10% in March and rising more than 16% in April.
This year's storms could have the same sort of impact on employment and retail sales. Before the storms, economists had been tentatively forecasting a modest gain in payrolls in February, in part because of ramped up hiring for temporary Census workers. Now, they'll sharply lower their estimates for payrolls and hours worked.
For March, a big rebound in payrolls could be expected, but the gain would mostly reflect people who made it to work in March after being snowed in during February, not new jobs created in March.
Grandpa’s take:
Tens of millions of people couldn’t get the store but eventually their gallon of milk, video game and their spring clothing! SAY WHAT!!! This is not Haiti or Chile! The weather was forecast well in advance of the initial flake. No one stocked up on food, beverages, warm clothing or snow removal equipment prior to the first couple of inches? What about the photos of the bare grocery store shelves?
Some activity was lost forever; the losses are real, people who were snowed in won’t buy an extra lunch when they back to work, and they won’t park their car twice. SAY WHAT!!! If our economic salvation is as simple as eating two lunches and parking cars more than once a day, why did we spend hundreds of billions bailing out Wall Street and “cash for clunkers”?
SAY WHAT!!! Comparing February 2010 to the 1993 “storm of the century” is ludicrous. 300 people lost their lives, $6 billion in damages, affected 26 U.S. states and impacted Cuba to Canada.
Before the storms, economists had been tentatively forecasting a modest gain in payrolls in part because of ramped up hiring for temporary Census workers. SAY WHAT!!! Do you really believe we are all that naive? An increase in jobs based on temporary Census workers is an indication of a firm economic foundation and sustainable growth?
FOR THE RECORD: since the week ending 1/9/2010, the average weekly initial jobless claims averaged 469,571. The continuing claims (excluding the emergency benefits separate category claims) averaged 4.6 million.
It would appear that there has been a tremendous amount of “fluff and stuff” in this country since January 2010.
Wear shades America!!
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