Weather or Not
As human beings we have an incessant need to explain events and will even embrace false narratives over the unknown or unexplained. With research I may be able to deterinime for my mother who ate her prized tomatoes but she still doesn’t have her tomatoes. During my time in public sector forecasting many individuals would explain sales by determining that weather was the main culprit with out providing meaningful data or reasoning. No doubt this line of thinking also infects business news and political talking points.
That is not to say weather has no effect on economic activity, in a dynamic economy almost everything maters, but the question for data analysts is if it is a determining factor. When examining the harshest winters in US history since the fifties when there is more reliable GDP and weather data there is not a single quarter with negative economic growth in fact the average for the harsh winters mirrors that of the whole sample of Q1 at 3.2%. In other words, not a single harsh winter saw negative economic growth. When looking at GDP growth we actually see only a few times where negative GDP growth is an isolated event. Never has there been a negative isolated quarter greater than 1% in recorded economic history much less -2.9% we saw in Q1 of 2014. The narrative that this is an isolated event due to a harsh weather is not supported by the data but unfortunately may be the pretext of negative things to come.