March 26th, 2015
from the Chicago Fed
The unusually cold and snowy 2013 - 14 winter substantially disrupted the routines of people across the United States, leading commentators and policymakers to ask if the weather affected economic activity as well. There were many media stories that supported this hypothesis. For instance, some employees were reported as unable to commute to work, and some projects, particularly in construction, were delayed due to equipment limitations or concerns about safety in the cold and snow.
Supply chains were sometimes interrupted; for instance, steel production along the coast of Lake Michigan was affected because the boats delivering iron ore were unable to navigate the deeply frozen Great Lakes. Furthermore, retailers reported that households may have delayed shopping due to extreme weather. And finally, some expected that the higher heating costs and the expenses for home repairs (such as burst pipes) would hamper consumer spending.
Consistent with these anecdotes, economic indicators published early in 2014, such as industrial production, employment, and car sales, showed that economic activity had slowed substantially in December 2013 and January 2014. While the economic recovery following the Great Recession had appeared to accelerate in the fall of 2013, these statistics suggested a renewed slowdown.