Friday morning, the government reported that the economy grew at a pathetic annual rate of 0.7 percent in last year's final quarter.
As it did in covering the disappointing Christmas shopping season, the business press partially blamed yesterday's awful result on the weather, i.e., warm weather.
Here's Martin Crutsinger at the Associated Press, in a report I will comment up further in a later post (bolds are mine throughout this post):
Much of last quarter's weakness reflected a slowdown in consumer spending, which grew at a 2.2 percent annual rate, compared with a 3 percent rate the previous quarter. Analysts said part of that weakness likely reflected a warmer-than-normal December, which reduced spending on winter clothing and utility bills.
Here's Paul Davidson at USA Today:
And consumer spending held up fairly well, rising 2.2%, but that was slower than the third quarter’s 3% rise. Household pocketbooks have been buoyed by strong job growth, cheap gasoline and reduced debt. But unusually warm weather late last year dampened consumer outlays on utilities.
Lucia Mutikani fell into line at Reuters:
Gross domestic product increased at a 0.7 percent annual rate, the Commerce Department said on Friday in a report that showed a further cutback in investment by energy firms grappling with lower oil prices. Growth in consumer spending also slowed as unseasonably mild weather cut into spending on utilities.
... Unusually mild weather hurt sales of winter apparel in December and undermined demand for heating through the quarter.
With gasoline prices around $2 per gallon, a tightening labor market gradually lifting wages and house prices boosting household wealth, economists believe the slowdown in consumer spending will be short-lived.
Chico Harlan at the Washington Post didn't mention the weather, but a caption at an accompanying Reuters photo did:
Consumer spending slowed as warm weather cut into sales of clothing and demand for heating.
Why was "warm weather" such a popular excuse? Perhaps because the Obama White House said sa — twice:
... Consumer spending grew at a 2.2 percent annual rate, somewhat below its pace over the prior four quarters, with reduced spending on utilities due to unseasonably warm weather in the fourth quarter subtracting from the total.
... In the fourth quarter, especially slow utility spending subtracted from consumption, because the unseasonably warm weather reduced heating demand.
Last spring, in excusing weak reported first-quarter 2015 growth, the business press blamed that quarter's "harsh winter weather." This time around, the problem was supposedly that the weather was too warm, as if consumers are too stupid to buy winter clothing they know they'll need because the temps were nice in mid- and late-December. Also, consumers are certainly smart enough to put 2 and 2 together and figure out that their utility bills will be coming in lower. If they were really confident about the direction of the economy, they'd have spent a portion of that extra money as well. But it didn't happen.
The only thing left is for the excuse-makers to try to explain away a future disappointing quarter by claiming that it occurred because the weather came in as expected.
Cross-posted at BizzyBlog.com.
