The weather is not the reason for the bad news
Posted by Ray on March 1, 2010 under Economy | 
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I just read a story where Larry Summers, White house economic advisor, is blaming the weather for a potentially ‘distorted’ jobs report this Friday. Seriously, we are still going with the bad weather? It must be snowing everywhere, the UK, Greece, China, the Ukraine, Dubai, etc. The data all over the world, including today’s ISM number, is rolling over and in some areas it is just plain scary. I got news for you, it has nothing to do with the weather, at all.
Over the past few weeks more and more companies announced layoffs, not a good sign, and the initial claims data went way up over the past 4 weeks. The data started to roll over before the snow hit the ground. Not to mention, but the last time I checked it usually snowed in the winter time anyhow. I realize we had a few days of snow, but nothing major and it is beyond me how snow would be firing people. I will say that the weather impacted retail sales, but not all this other data.
Let’s not forget that the vast majority of the bad weather was also in the Northeast so I am very excited how the bad weather in NY caused California to have increased unemployment figures. Never in my life have I seen such a snow job being perpetrated by the talking heads and now Washington blaming bad weather for horrible economic data. What will happen next month when we have even more layoffs and there is no weather to blame? Maybe we will blame the sunshine because people are so broke they cannot afford sunglasses… wait that kind of admits the economy stinks, never mind.
My point is that the data, well before the snow, rolled over viciously and it is the economy that is the problem. We are over 2 years into this thing, recession/depression, whatever, and we are still losing jobs, that is not good. The unfortunate part is we spend trillions only to be in a position where employment is continuing to contract. It is fair to say that the stimulus probably helped a little, but clearly it was not as big of a help as the administration claims. As an aside, it will be interesting to see if some municipalities file for bankruptcy in the next couple of weeks, maybe that is because of the bad weather as well.
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