Economy Withstands Hit; Snowstorms Unlikely to Freeze Recovery, as Sales Are Mostly Delayed, Not Lost
The crush of multiple snowstorms over the past week may have frozen economic activity for a couple of days, but it's unlikely to ice the economy's rebound.</br></br>Snow accumulations broke records across a wide swath of the eastern U.S., closing schools and governments, canceling flights and shuttering private businesses. But "Snowmaggedon's" swift blow to business activity isn't expected to last.</br></br>"Generally, these kinds of things don't have a meaningful effect on the economy," said Moody's Economy.com economist Mark Zandi. "It affects the timing of economic activity, but in terms of dollars and cents these kinds of things don't add up to much."</br></br>Losses from weather events come in two forms: One is business that can be made up, such as retail sales that shift to a later date--the sweater not bought today, but bought next week. The other is transactions like restaurant meals, which are lost forever because people can't make it through snowdrifts to spend money. Economists believe most disruptions cause business to shift, rather than be lost, which is why the longer-term impact is muted. The reality is that both go on simultaneously. The storm kept travelers out of Washington, D.C.'s hotels, for instance, but some filled up rooms with local residents who lost power at home.</br></br>That's why Jill and Michael Gold checked into Washington's downtown Mayflower Hotel last Saturday with three children and four pets, including a dog named Ziggy and a gecko named Gordon. They checked out Tuesday, just as another storm was about to wallop the nation's capital.