One of the hangovers of Hurricane Sandy was the effect on late October economic activity. Everything from employment data to retail sales dipped, and sometimes collapsed, depending on an area’s proximity to the storm. Along with these numbers came forecasts of surges in gross domestic product in some localities as repair and construction of devastated areas began.
Nemo, a blizzard super-storm, as it has begun to be labeled, will shutter businesses from Michigan to New Jersey to New York City and most of New England. Snow blowers and food sales will get a lift ahead of the blizzard. Visits to stores, car dealers and restaurants will be delayed until later in February, and in some cases will be canceled completely.
The size of these new families of storms, brought on by global warming or random disturbances in the atmosphere, has made a shambles of the efforts economists make to carefully forecast GDP, joblessness and even imports and exports. A science that has never been more than an guessing game slips closer to chaos. Storms become a variable that can hardly be measured.
Now, the game of commentary on the effect of the storm on models of how the economy will do can begin in earnest. Experts will be dragged onto financial TV shows and interviewed by reporters. What will happen to February GDP and retail sales? And will there be a March rebound in economic activity. The answers are simple. February numbers will be hurt; March’s will be improved. So what will all of those experts be doing on TV? Stating the obvious, and no better.
There really are no activities like harsh weather to throw economists into confusion and anxiety, whether the trigger is drought or flooding, snow or wind. Someone profits from every disaster. This time, as experts sort out Nemo’s aftermath, it will be the economists.
Douglas A. McIntyre