 |
|
Storms put damper on US economy
Retail sales are down in April, and residential construction is still slow. The agricultural sector could also be affected.
By Ron Scherer | Staff writer of The Christian Science Monitorfrom the April 17, 2007 edition
Page 1 of 2
New York - From an economic standpoint, April's weather may go down as the cruelest month.
Forget about April showers. So far, it's been blizzards and nor'easters. And the weather gurus aren't sure the arctic conditions are over yet: Next week may still require scarves, Wellingtons, and mukluks.
For an economy that is counting on the consumer, the timing is not good. Easter was early this year, so shoppers hit the malls in March. Now, retailers will be hard pressed to keep up the momentum, especially when they're scraping ice and snow off their parking lots. The wet and cold weather will also adversely affect residential construction, which was already experiencing a slowing of demand.
But despite the dark and stormy clouds, economists still don't believe it will be enough to drive the economy into a recession.
"For the past century, weather has not been the culprit in driving the economy into a recession," says Richard DeKaser, chief economist at National City Corp. in Cleveland.
Still, after posting strong sales in March, retailers are not optimistic about this month. By contrast, retail sales last April – which was a warm and balmy month – were the strongest of the year. This year, they are running at the weakest level in 22 years, says Bill Kirk, CEO of Weather Trends International in Bethlehem, Pa., which analyzes weather patterns for businesses. "When retailers are not selling goods, there is a trickledown effect," he says. "April will be the catalyst for a broader slowdown across many sectors."
The wet weather may affect impulse spending more than anything else, says Jeff Blodgett, vice president for research at the Connecticut Economic Resource Center in Rocky Hill. But, he says, "If you need a car or a washing machine, you are still going to go out once the weather clears."
A lost month of retail sales may not sink the entire year, says Scott Krugman, a spokesman for the National Retail Federation in Washington. "There are plenty of opportunities to bounce back. Hopefully, April will be a blip on the radar."
From a meteorological standpoint, it will certainly be a sizable blip. So far, it has been the coldest April in 24 years, says Mr. Kirk. "The year-over-year change is as extreme as we have ever seen," he adds.
RSS feed
