The Last Time This Happened, US GDP Crashed By 5%

It was about a year ago today, when economist consensus, ever true to its “momentum extrapolation” ways, predicted that in the first quarter of 2014 US GDP would grow by a solid 2.2% (down from 2.9% predicted several months previously). This happened even as the very economists forecasting the GDP number allegedly had problems getting to and from work, due to all the snow and cold weather. Yes, in the middle of winter: truly unheard of.

The rest was history: a few months later when the final calculation of annualized Q1 GDP was released on June 25, the BEA reported that it had crashed by a whopping 2.9%: a delta of more than 5%!

And since nobody had predicted such an epic collapse in the US economy, an excuse was promptly cobbled together: the weather, and specifically, the “polar vortex” of January and early February, that was raging at the time when those calculating the impact of the weather on GDP only saw it subtracting a few basis points of growth.

The reason we brings this up is because as those who have been following the ridiculous weather in Boston and its surroundings over the past 30 days, when as reported previously the city has seen a record monthly accumulation of snow, and the Northeast in general, the weather this year is as bad if not worse as the “polar vortex” that hobbled the US economy a year ago and cost over $100 billion of lost annualized growth for the quarter.

Actually scrap “as bad” – it is worse. According to Reuters “record-breaking cold gripped the Eastern United States on Monday as an icy winter storm crippled the nation’s central states before it was expected to barrel toward the mid-Atlantic in time to snarl Tuesday’s morning commute.”

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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