Wintry Weather May Chill Economic Growth - Real Time Economics - WSJ

The cold weather put a chill on the economy this quarter, according to Macroeconomic Advisers.

On its blog, the forecasting firm reports that degree day data – figures the National Weather Service puts together to measure cooling and heating demand – show that U.S. temperatures were one-and-a-half standard deviations below normal in December and January. (Economist to small child: “Honey, put a sweater on, it’s two standard deviations below the January mean out there!”)

Plugging the degree day data into a model that links unusual temperatures to economic output, Macroeconomic Advisers’ economists found that GDP growth in the first quarter will be an annualized 0.6 percentage points lower than it would have been if temperatures were normal. And while they haven’t found a way to gauge it, they reckon this winter’s heavy snows further damped growth.