Elevated Snowfall Reduced Q1 GDP Growth 1.4 Percentage Points

This past winter was unusually harsh, and it’s showing up in the data.  We are tracking GDP growth of just 0.5% for the first quarter, a sharp step down from 3.4% averaged over the second half of last year.  To be sure, part of the weakness reflects an inevitable slowing following unsustainably rapid inventory-building over the second half of last year.  But the unusually harsh winter played a role, too.  In past work, we identified the effects of the harsh winter by keying in on the unusually cold winter temperatures.  But we were unable to study the effects of snowfall because an appropriate time-series on national snowfall, to our knowledge, did not exist … until now. We have compiled a snowfall database and developed several measures of unusual snowfall to help us understand its role in the weak Q1 data.  The snowfall database is built-up from daily measures of snowfall … Continue Reading

MA’s Monthly GDP Measure Rose 0.4% in February

Monthly GDP rose 0.4% in February.  This followed a decline of 0.6% over the prior two months.  Contributing to the February increase were solid contributions from inventory investment, PCE, and the portion of monthly GDP not covered by the monthly source data.  These were partially offset by decreases in net exports and capital goods.  The level of monthly GDP averaged over January and February was 0.4% below the fourth-quarter average at an annual rate.  Our latest tracking forecast of 0.5% annualized GDP growth in the first quarter assumes a 0.5% (monthly rate) increase in March.   Click here for more information on MA’s Monthly GDP measure.