The economy-halting winter of 2013-2014 will hobble growth for the rest of the year
posted at 2:01 pm on June 16, 2014 by Noah Rothman
Observers were shocked in May when the first quarter of U.S. GDP growth was revised from an anemic 0.1 percent growth to an objectively repulsive -1.0 percent collapse. Administration allies and economists alike insisted at the time that this development meant that the harsh winter of 2013-2014 had curtailed economic activity even more than was previously believed.
“This quarter reflects everything that’s been bad about the long and cold winter,” Millan Mulraine, head of U.S. research at TD Securities, told Bloomberg in late April. “It betrays fairly strong underlying fundamentals that we believe continue to exist.”
“Nobody likes to see a negative for growth,” Standard & Poor’s Ratings Services economist Beth Ann Bovino told The Wall Street Journal after the GDP’s negative revision. “But it doesn’t change my expectation that the economy is recovering at a nice pace. I call it a recovery delayed.”
Well, it seems that the delayed economic recovery is set to remain delayed for the foreseeable future.
“The International Monetary Fund foresees the U.S. economy growing a modest 2 percent this year, below its previous estimate of 2.7 percent,” the AP reported on Monday. “That would be nearly identical to the economy’s 1.9 percent growth in 2013.”
In spite of the anticipated rebound in economic activity, the IMF report claimed, growth will not be strong enough to offset the damage done by the unusually cold winter months. Blame climate change.
While the economic rebound will alleviate some concerns about stalled growth, it is unlikely to assuage voters’ concerns about the troubling trajectory of the country. According to Gallup survey data released on Monday, virtually every indicator measuring voter satisfaction with their representatives ahead of the 2014 midterm elections is at or near historic lows.
According to that survey, only 23 percent described themselves as satisfied with the “way things are going in the United States.” That is nearly identical to 2010, when just 22 percent said they were happy with the direction the country was going in and 15 percent of incumbent House members lost their reelection races.
While Americans remain concerned about the economy, the perception that economic conditions are improving is becoming more widely shared. Nevertheless, apprehensions about the state of the economy remain prevalent.
Although Americans’ confidence in the economy is improving slightly, the public still shows greater concern over it than in prior midterm election years. Specifically, 44% mention an economic issue when asked to name the most important problem facing the country. That is significantly higher than in the 1998, 2002, and 2006 elections, but is down sharply from 2010, reflecting improvements in the economy since then.