Even as the rest of the US economy was a major disaster with the clear exception of inventory accumulation, which at some point will have to be sold unleashing the next deflationary wave and forcing the Fed's helicopter to finally take off, another question is what happened to the US consumer: after all, in the US one can use Amazon in the comfort of one's snowed in home, and while the crash in oil turned out to be unambiguously bad (just as we warned) for CapEx, some 70% of the US economy was and is in the hands of the relentless spending habits of Joe Sixpack.
Which is why a quick look at what said Joe spent in the harsh winter reveals something stunning: no, not that the most consumed "service" was again healthcare - mandatory spending on Obamacare [4]will be with us for a long, long time, "boosting" the US economy by this mandatory spending item.
No, what surprised even us is that far from subtracting from GDP growth, the harsh winter actually boosted consumption, in the form of Utility (i.e., heating) spending, which made up the second largest increase in personal consumption in the first quarter. Because, to every economist's cries of horror, freezing weather while perhaps reducing discretionary spending actually boosts spending on such mundane, if very expensive, tasks as utilities which, to the same economists, also translates into growth.
[5]
