Economic growth will slump to 2.2 percent in the first quarter, according to the average forecast of 46 economists surveyed by
The Wall Street Journal.
That's down from a projection of 2.5 percent growth in January. GDP expanded 3.2 percent in the fourth quarter of 2013, but that number is expected to be revised down.
The economists predict weather would subtract 0.3 percentage point from first-quarter growth. They were surveyed Feb. 7-11, before this week's snowstorm and news of a larger-than-expected 0.4 percent drop in January retail sales.
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The wicked winter weather has interrupted transportation, kept businesses closed and kept consumers in their homes, The Journal notes.
It also has raised consumers' utility costs. "The jump in home heating bills will act as a temporary tax and slow spending into spring," writes John Lonski, chief economist of Moody's Capital Markets, The Journal reports.
To be sure, the economists see the economy rebounding in following quarters, with 2.8 percent growth in the second, 3.0 percent in the third and 3.1 percent in the fourth.
For all of 2014, they project an expansion of 2.8 percent, which would be the strongest annual performance since 2010.
As for the weather, it adds a degree of uncertainty to financial markets.
"I can't quantify the degree to which the weather is hampering efforts in assessing the true condition of our economy. It does make me suspicious of anything based on surveys," Dan Fuss, a portfolio manager at Loomis Sayles, tells
Reuters.
"You just have to say that you won't get hung up on short-term reports of economic or market data."
"Winter will end eventually and people will return to the malls," says Beth Ann Bovino, chief economist of Standard & Poor's and the most accurate forecaster surveyed by The Journal in 2013. Bovino forecasts GDP growth of 3 percent for 2014.
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