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Is It Really Just The Weather?

Tyler Durden's picture
Submitted by Tyler Durden on 02/21/2014 15:10 -0400



 

The "common knowledge" meme among the uber-paid economists and talking-heads os Wall Street remains that if data is bad, it's the weather's fault; but if data is good, that's the recovery. However, as Lance Roberts explains in this brief clip, the deterioration in US fundamental macro data is not a one-month blip and in fact "the trend of economic growth has clearly been on the decline rather than gaining strength as has been hoped by the majority of economists". Furthermore, he notes (and shows in simple chart form) that the trend of consumer weakness, which makes up 70% of economic growth, has declined to levels that are more normally associated with very slow growth economies. Simply put, it's not the weather stupid, it's the economy.

 

Via Lance Roberts of STA Wealth Management,

I recently sat down with Gerri Willis at Fox Business News, along with Rick Sharga to discuss the economy and whether it is really JUST the weather that is dragging on the economic reports as of late...or is it something else?

This is a subject I have touched on recently stating:

"The recent "polar vortexes" have crippled much of the North and the North East with record low temperatures and severe weather and snow conditions.  The economic impact of just the first polar vortex that hit in December is already calculated to be well above a $10 billion dollar hit to the economy.

 

Surging electricity and heating costs are eating into real disposable incomes which is diverting consumption away from retailers.  Inclement weather has shut down manufacturing activity and will crimp demand for employment and new orders as witnessed by the sharply reduced employment report in December and this week's ISM survey.

 

The chart below is the STA Economic Composite Index (for details on its construction read this) from January 2011 to present.  As you can see, the trend of economic growth has clearly been on the decline rather than gaining strength as has been hoped by the majority of economists.  I have also labeled events that have contributed to the rolling recoveries and slowdowns along the way."

STA-EOCI-Index-020414

Moreover, as I discuss in the interview below, the trend of consumer weakness, which makes up 70% of economic growth, has declined to levels that are more normally associated with very slow growth economies.

PCE-GDP-YOYChg-121213

I also agree with Rick's views on the mortgage and housing market.  See my latest housing updates below.

Is Housing Set To Lift Off?

Updating The Housing Recovery

 

 

 
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Fri, 02/21/2014 - 15:16 | 4462736 TeamDepends
TeamDepends's picture

<Au 1330 Ag 22 today

<Not

Fri, 02/21/2014 - 15:39 | 4462809 Boris Alatovkrap
Boris Alatovkrap's picture

OT - much to apologies

Boris is struggle with massive bowel movement, will be not so present for day to come.

Fri, 02/21/2014 - 16:45 | 4463021 knukles
knukles's picture

The Whether is the Truth
It's all about the Whether
Whether we're going to be employed in the morning, whether we're going to feed our families, whether or life savings is going to be confiscated, whether we'll be able to ever retire, whether we're going to need to defend ourselves from the rabble supported by our very own tax dollars, whether the politicians have any integrity and care a fucking bit about the people, whether anybody even gives a rats ass anymore

Yes, It's True
It's All About the Whether

Fri, 02/21/2014 - 19:33 | 4463606 mickeyman
mickeyman's picture

It's all really because the Superbowl was a blowout.

Fri, 02/21/2014 - 19:47 | 4463649 philipat
philipat's picture

The US economy comprises 70% consumer consumption. Therefore, growth requires increased spending by consumers who have less disposable income. It's not rocket science.

Fri, 02/21/2014 - 16:32 | 4462979 Uber Vandal
Uber Vandal's picture

At least none of the dates mentioned (March 3, 10, 17, and 24) do not coincide with the down trend on that 1929 stock chart or anything......

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2...

 

Fri, 02/21/2014 - 15:18 | 4462737 MagicMoney
MagicMoney's picture

Well ZeroHedge, instead of asking the same questions about the weather, how about we just wait until it gets sunny again for a month or 2 and stop asking these questions...

Fri, 02/21/2014 - 15:34 | 4462795 NOZZLE
NOZZLE's picture

Moar $199/mo. 34 month leases on Cadillac SHTY's, that will bring the engines of the economy roaring back to life.  I still think that it is fantastic that as a nation we were able to come together and create ALLY Bank for the purpose of making GM an obama success story thru subprime lending and 30% residual value loss leading vehicle leases.  GM is alive and BinLatent is dead, we shifted the balance sheet liability to ALLY Bank (good luck finding a branch) and good luck finding BinLatent's corpse.

Fri, 02/21/2014 - 17:46 | 4463307 Make_Mine_A_Double
Make_Mine_A_Double's picture

Yo Nozz....good to see you dude......7/17

Fri, 02/21/2014 - 15:48 | 4462833 Flakmeister
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Admittedly this is topic that has been beaten like a rented mule, but this collection of comments is fucking pathetic...

At least be funny if you have nothing to add....

Fri, 02/21/2014 - 16:59 | 4463086 Nobody For President
Nobody For President's picture

@Flack

Beaten like a rented mule is pretty good.

Fri, 02/21/2014 - 15:49 | 4462838 GreatUncle
GreatUncle's picture

define slow growth economy.

 

One where the level of paper value is soooooooo high it dwarfs the real economy. Then continually attempting to increase this paper value further crushes / stagnates the real economy when there is no real grwoth. You end up with smackdowns in everything to attempt to keep real values down using paper value (just like gold). The thing is you can only hold the value suppressed for so long with ever increasing debt. Eventually the circle must be completed to justify the level of debt that is only ever viable by the size of the economy.

Starbucks coffee and a Big Mac 10 dollars a piece should do it and make the 16+ trillion debt far safer.

We have all been  played for cunts by central bankers.

Fri, 02/21/2014 - 15:59 | 4462878 CaptainSpaulding
CaptainSpaulding's picture

Did Al Roker confirm this?

Fri, 02/21/2014 - 16:21 | 4462941 Winston Churchill
Winston Churchill's picture

Too busy working on the FOMC to comment.

Fri, 02/21/2014 - 16:14 | 4462921 news printer
news printer's picture
What a difference a week makes: Pictures reveal the damage caused by devastating floods

http://www.mirror.co.uk/news/uk-news/uk-floods-before-after-pictures-3166292

Fri, 02/21/2014 - 16:37 | 4462999 SDShack
SDShack's picture

What I find intetesting is that post Y2K, with only one brief exception, GDP has never exceeded 4%. All this while GDP numbers have been massaged every way possible to show growth, plus the global warming zealots claim this was the warmest period ever on record. So we better increase pumping out that CO2 PDQ or we will be in a depression soon.

Fri, 02/21/2014 - 17:42 | 4463293 Make_Mine_A_Double
Make_Mine_A_Double's picture

Just from my observation post and much to my chagrin, we had a spike in our business that went thru Lunar New Year. I couldn't figure for the life of me whom is importing all this shit and who the hell might be buying it.

But appears the Kool Aid script is no longer working and reality has set in as we are now seeing a downturn with a vengence.

I think the collective brainwashing that has prevailed for last couple years is even wearing off on the true beleivers at the street level. Not totally there yet, but it is finally creeeping into their conscious that all is not what it appears to be.

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