From the Council of Economic Advisors:
...Advance Estimate of GDP for the First Quarter of 2014
FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS
1. Real gross domestic product (GDP) rose 0.1 percent at an annual rate in the first quarter of 2014, following the 3.4 percent annual pace in the second half of 2013. Looking at the various components of GDP, consumer spending grew at a rapid pace, mainly reflecting sharp increases in health care and utilities consumption, while the other elements of consumer spending on net rose only slightly. Consumer spending on food services and accommodations fell for the first time in four years, one of several components that was likely affected by unusually severe winter weather. Exports and inventory investment, two particularly volatile components of GDP, also subtracted from growth.
2. The first quarter of 2014 was marked by unusually severe winter weather, including record cold temperatures and snowstorms, which explains part of the difference in GDP growth relative to previous quarters. The left chart shows the quarterly deviation in heating degree days from its average for the same quarter over the previous five years. By this measure, the first quarter of 2014 was the third most unusually cold quarter over the last sixty years, behind only the first quarter of 1978 and the fourth quarter of 1976. In addition, there were four storms in the first quarter that rated on the Northeast Snowfall Impact Scale (NESIS). The right chart shows that no quarter going back to 1956 had more than three such storms.
3. Within the first quarter, several key indicators were lower in January and/or February before rebounding strongly in March, suggesting that the severe weather had a disruptive effect that only began to abate at the end of the quarter. Light vehicle sales, average weekly hours, core retail and food service sales, and core capital goods shipments dipped starting in December and/or January before bouncing back in March, and so were left little changed for the quarter as a whole. One outside group has estimated that the elevated snowfall in the first quarter slowed the annual rate of GDP growth by 1.4 percentage points, with all of that lost activity to be made up in the second quarter.......MORE
