Back during the winter, the economy seemed to be booming, and the sceptics said: “It’s all the warm weather making the economy look artificially strong!”
Now all the data is turning south, and the roles have reversed.
The bulls and optimists are clinging to the hope that this is just “giveback” after the warm winter pulled ahead activity, and that it will all normalize.
This chart from Goldman Sachs represents that view perfectly.
It shows the month-over-month growth in payrolls for weather-sensitive industries (teal line) and non-weather sensitive industries (purple line).
Photo: Goldman Sachs
The good news is that industries not generally affected by the weather are holding up and showing growth. The industries that boomed in the winter months are seeing giveback.
Bulls can hope that as the summer comes, and the freak weather effects wear off, then all industries will show the steady growth of the non-weather-sensitive sectors.
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