Cold weather chilled economy more than expected - Bring Me The News

Cold weather chilled economy more than expected

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Traffic stalled, schools closed, travel discouraged. With bitter temperatures and repeated snowfall dumps (remember?), the harshest winter in decades kept millions of people home, and the economy stagnated as a result.

The Los Angeles Times reports that the winter economic slowdown was much worse than had originally been estimated. The story, citing a report from the Commerce Department that was released Thursday, said that Old Man Winter also chilled the recovery that had appeared poised to take off this year.

BBC News added the US economy "shifted into reverse" in the first three months of 2014, shrinking by an annual rate of 1 percent. Most Wall Street analysts had forecast the economy to contract by around 0.5 percent. The slide represents the worst economic performance since the first quarter of 2011.

A big factor in the contraction was a larger decline than originally estimated in how much businesses spent to restock their shelves.

“Companies were not able to generate more inventory to offset that consumption because trucks were stuck on the road and employees couldn’t get back to the factories,” said Bernard Baumohl, chief global economist at the Economic Outlook Group.

But other recent data indicate that economic growth has picked up significantly as the snow has melted and as spring has arrived, putting the recovery back on a slowly improving track.

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