Winter is only gradually loosening its grip on the country, with some wintry days in the Northeast and Midwestern states, and even unseasonably cool days in late March in our region. Yet winter’s grip remains reflected in the economic data, as business activity earlier this year was down in key economic reports.
The good news: Old Man Winter hurt for a while, but a rebound is inevitable.
Business inventories suffered in February, as they had in December; they were only modestly up in January. The consensus view among economists is that winter depressed sales and business activity across many fronts, but some areas of the latest reports were better off. Orders for long-lasting goods such as autos and airplanes rose significantly in February.
The latter, particularly for the high-dollar orders for airplanes, is one of the traditionally volatile categories, but it is still some good news.
The Institute for Supply Management said its gauge of manufacturing activity expanded more quickly in February as companies received more orders and boosted their stockpiles. The institute’s manufacturing index rose to 53.2 in February, up from 51.3 in January. That only partially reversed a five-point drop in January — probably another impact of the hard winter weather. A reading above 50 indicates that manufacturing is expanding.
Consumer confidence also sagged a bit in the Thomson Reuters/University of Michigan survey, down to 80 from 81.6 in February.
Economists project that overall economic growth slowed to less than 2 percent in the January-March period. But they are forecasting growth will rebound to around 3 percent for the rest of the year. If that occurs, it would be the fastest annual economic growth since 2005.
It would be welcome news for people still out of work or underemployed for their level of training and education.
Warmer weather helps, we suspect, a lot.