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    US Economy Suffers in First Quarter of 2015 as Brutal Winter Curbs Sales

    By By Mark Leberfinger, AccuWeather.com Staff Writer
    May 07, 2015, 1:31:59 AM EDT

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    Severe winter weather played a major role in paltry U.S. economic growth in the first quarter of 2015, but hopes are high for an increase in spring and summer sales in regions that were gripped by a long winter.

    Weather has a strong impact on consumer behavior and our ability to provide goods and services, AccuWeather Enterprise Solutions Senior Research Analyst Rosemary Radich said.

    A well-above average snowfall in New England and cold air helped slow the economy, Jason Furman, chairman of the President’s Council of Economic Advisers, said in a White House post.

    The nation’s Gross Domestic Product (GDP) increased 0.2 percent for the first quarter, the Bureau of Economic Analysis estimated on Wednesday, April 29.


    “This quarter was only the fourth in 60 years on record with three or more snowstorms sufficiently severe to be rated by the National Climatic Data Center’s Northeast Snowfall Impact Scale,” Furman said.

    “In addition, as measured by heating degree days, this quarter was the third coldest in twenty years. Indeed, winter weather likely reduced both consumption and investment, contributing to this quarter’s below-trend output growth,” he added.

    On the other hand, extreme winter weather events can drive demand for seasonal goods such as ice melt, winter coats and snow boots, Radich said. Following a long winter, the return of calmer weather can cause retail sales to climb.

    “When experiencing prolonged winter weather, the presence of nice weather can trigger different products like outdoor sporting equipment, camping equipment, swimwear and outdoor grilling products. Product purchases are often very dependent on consumer mood, which is very sensitive to weather,” she said.

    "Pent-up demand from long periods of cold weather will be seen in the New England region. Once spring and summer are in full swing, there will be a larger uptick in nice weather sales than if we had experienced a mild winter," she explained.

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    AccuWeather Enterprise Solutions help businesses prepare for what is to come, weather-wise.

    “Knowing when consumer demand will be high allows businesses to stock up merchandise and increase sales through appropriate marketing campaigns, and in turn when consumer demand is low, businesses know when to lower stock and run campaigns with price cuts to lessen the negative impact of weather on sales,” Radich said. “We also provide warning services so businesses can ensure the safety of their employees and ensure products are delivered where demand is highest in the safest, most efficient way possible.”

    The Federal Reserve reported that tourism and travel started to rebound in mid-April, following a winter that impeded travel at times.

    Boston and New York reported tourism below levels seen a year ago, according to the Beige Book, a report of economic activity compiled by the 12 Federal Reserve Districts.

    Philadelphia, Cleveland, Atlanta and Dallas reported a slowdown in construction activity due in part to harsh weather conditions, according to the report.

    Sectors that deal with seasonal items and are sensitive to consumer demand experience the greatest impacts from weather, Radich said.

    “Retailers, recreation, and food service sectors are extremely weather sensitive, especially for those with high seasonality (clothing, home improvement, outdoor dining, outdoor amusement parks, etc.),” Radich said. “Manufacturing and wholesale trade is often ultimately influenced by consumer demand, which is weather sensitive (i.e. clothing manufacturers).”

    Transportation and warehousing are dependent on weather for the most efficient delivery.

    “During bad weather, consumers may increase demand for products like batteries and bottled water, but the same weather that increases product demand can prevent distributors from getting products to the stores in time,” she said.

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