Frozen: The U.S. Economy Barely Grew This Winter

A blog about business and economics.
April 30 2014 10:18 AM

The Economy Barely Grew This Winter

Snowstorms: terrible for your commute, terrible for the economy.

Photo by Sara D. Davis/Getty Images

Remember those horrible snowstorms that backed up traffic for miles in place like North Carolina and otherwise made us all want to hibernate? Well, they pretty much buried the U.S. economy, too. The government reports today that real gross domestic product grew at a measly 0.1 percent annual rate last quarter, as exports and business investment declined. Most economists seem ready to chalk up much of the slowdown to the miserable winter weather, which kept shoppers indoors, slowed construction, and otherwise turned the last few months into a cold and soggy mess. Chances are, there will be some rebound this quarter—a spring awakening, if you will.

Still, one part of the report seems like a genuine cause for concern: housing. Residential investment has now fallen for two straight quarters. Some of this, again, was the winter at work—nobody wants to pour a foundation when there’s sleet and snow coming down. But we may also be witnessing the chilling effect of the Federal Reserve’s decision to taper its bond buying, which had been meant to put a lid on interest rates. As the Wall Street Journal pointed out a few days ago, new mortgage lending is now down to a 14-year low, due in part to rising rates that first jumped after Ben Bernanke hinted at the taper last May. The real drop has been in refinancing. But borrowing for new homes is basically flat, which isn’t exactly ideal.


The WSJ summed it up nicely in this clip-and-save infographic:  



The U.S. can grow without a booming housing market, but probably not very fast. And no, in case you were wondering, nobody really expects the Fed to reverse course.

Jordan Weissmann is Slate's senior business and economics correspondent.



Meet the New Bosses

How the Republicans would run the Senate.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Cheez-Its. Ritz. Triscuits.

Why all cracker names sound alike.

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

The Afghan Town With a Legitimately Good Tourism Pitch

A Futurama Writer on How the Vietnam War Shaped the Series

  News & Politics
Sept. 21 2014 11:34 PM People’s Climate March in Photos Hundreds of thousands of marchers took to the streets of NYC in the largest climate rally in history.
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
Sept. 21 2014 9:00 PM Attractive People Being Funny While Doing Amusing and Sometimes Romantic Things Don’t dismiss it. Friends was a truly great show.
Future Tense
Sept. 21 2014 11:38 PM “Welcome to the War of Tomorrow” How Futurama’s writers depicted asymmetrical warfare.
  Health & Science
The Good Word
Sept. 21 2014 11:44 PM Does This Name Make Me Sound High-Fat? Why it just seems so right to call a cracker “Cheez-It.”
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.