As we entered Q1 2014, hope was high that this was it - this was the quarter when, with stocks at record higs, employment data improving and a confident Fed tapering, the US economy would reach escape velocity and back we could all go to "believing" in the futures once again. The 2.6% growth expected at the start of Q1 quickly evaporated into a -0.5% contraction in the economy due to "cold" weather in the winter. Of course, the Keynesian-hockey-stick believers have marked up their "been-down-so-long-it's-gotta-bounce-back" Q2 expectations to 3.3% growth... so what could go wrong. One glimpse at the following chart will explain it all - and it's the weather that will be blamed once again...(with 48% of the nation now in drought conditions).
"Just Too Cold" Weather knocked 3 percentage points of growth off the world's largest economy...
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Just how much will the most widespread drought in a century knock off the 3.3% hope for Q2?
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with 48% of the nation abnormally dry and almost 15% in extreme drought...
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We suspect phrases such as "it was just too hot to shop" or "due to unseasonably hot weather, sales of XXXXXXXXXXXXXXXXX were dramatically affected" will be prevalent in Q2 earnings calls...