March 11, 2008
Weather Economics.
I'm kind of shocked about a newspaper story I'm NOT seeing, namely the story that says that the recent slowdown is do the the harsh winter we've been having. They used to run stories about how warm weather increased spending:
The warmest January in more than 100 years lured consumers out to the shopping malls to spend money at the fastest clip in six months, giving a strong boost to the economy as the new year began.
So, does the weather play a role? My wife last night was lamenting that she hadn't been able to do any real shopping in a long while because of the lousy winter weather. Yes, an anecdote, but a perusal of back issues says the weather spending connection was once taken seriously by the media. I don't recall one story yet this winter making that claim.
Could it be that the media is trying to (1) tarnish Bush and (2) affect the outcome of the election?
Another interesting part of the 2 year old story:
However, a third report showed construction spending managed only a 0.2 percent increase in January, the weakest gain in seven months and far below the 1 percent analysts had expected.A big reason for the slowdown was a tiny 0.1 percent increase in private home building, the poorest monthly performance since an actual decline of 0.4 percent last June.
It was a further indication that residential construction, which has enjoyed five boom years, is beginning to slow.
Sales of both new and existing homes fell in January despite the warm weather. Economists predict continued increases in mortgage rates will slow housing further in coming months.
What's this, a slowdown in the housing market 2 years ago? I thought the current slowdown was just that - current and because of the current sub-prime "debacle". Sometimes it really pays to go back and read old news because the news itself has so little correct historical context to it and too much current narrative.
Posted by Kevin Murphy at March 11, 2008 10:54 AM | Economics | Media Criticism
