Blame It On Winter -- May 29, 2015

Updates

Later, 6:32 p.m. CT: President Obama sets another record. 
 

Original Post

The New York Times suggests that this past winter was partly the reason for the contraction:

While statistical quirks and one-time factors like wintry weather in some parts of the country played a role, as did a work slowdown at West Coast ports, the lackluster report for January, February and March underscores the American economy’s seeming inability to generate much momentum.

Two comments:

• global warming
• winters tend to come every year 

"Wintry weather" in some parts of the country in January? LOL. In some parts of the country? LOL.

That "work slowdown" at West Coast ports? Hardly noteworthy. 

But to suggest that the contraction bothers the president is crazy. A president's legacy is not shaped by the economy -- especially one quarter. Unless there's a recession. Unless there's a recession after a gazillion dollars in stimulus.

But after a gazillion dollars in stimulus finally worked its way through the economy, we end up with tea leaves suggesting a recession. Remember: two successive quarters of contraction has been the traditional definition of a recession. GDPNow forecasts a further contraction in 2Q15.

That's why Janet Yellen is looking to revise the way GDP is calculated, but I don't think the Fed can move that fast to change things by July 30, 2015, the date for advance estimate of GDP for 2Q15.

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White House Version

This is from the White House:

The first-quarter slowdown was the result of harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices.  

Harsh winter weather? Winter comes every year and this year was another year of global warming according to the West Wing.

Tepid foreign demand? We rely on foreign demand to grow the economy? I thought it was all about minimum wage workers at McDonald's.

Saving the windfall from lower oil prices? Saving -- most Americans who saw any "windfall" were living month-to-month and were spending any money not spent on gasoline.

Another month of contraction, and it's a recession by the traditional definition.

This is simply hogwash. But you have to give them credit for trying.