Warmer temperatures boost US economy

4/23/2014 (Permalink)

Associated Press

WASHINGTON — Spring’s thaw is reviving the economy, too.

A recent batch of government and business reports show a U.S. economy emerging from winter’s deep freeze.

 Economists had expected growth to accelerate in 2014 after two years of slow and steady improvement. But an unusually bitter winter sent factories, hiring and consumer spending into hibernation.

Now, as temperatures rise, the economy is regaining momentum. Factories are busier. Consumers are spending more. Banks are making more loans to businesses. Companies have bigger plans to invest in plants and equipment. And the improvement appears to be widespread across the country.

  “The weather really played havoc. There were ice storms in Georgia. That is not something you see every day,” said Michael Dolega, senior economist at TD Economics. “Now, as Americans have dug themselves out and everything has melted, you’re going to get a bounce back.”

 Helping to drive the growth have been recent increases in manufacturing after tumbling in January. Factory production climbed 0.5 percent in March, after a 1.4 percent surge the previous month, the Federal Reserve reported last week. This suggests that manufacturers anticipate that demand from businesses and consumers will increase.

After the winter slowdown, recovering motor vehicle sales have boosted revenue for companies such as Batesville Tool & Die in Batesville, Ind.

  “We feel like the auto industry is all the way back from before the recession,” said Jody Fledderman, the company’s president and CEO. “The numbers we see are fully recovered from then. We expect to see 4 to 8 percent increases in the industry overall for the next three or four years.”

Shopping has also recovered along with temperatures. March buying at general merchandise stores, such as Wal-Mart, Target and Macy’s, climbed at the fastest clip in seven years, the Commerce Department said last week.