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Severe winter weather is costing the economy

6:00 AM, Feb 6, 2014   |    comments
A woman ducks under a utility line next to an ice-covered downed tree that landed atop a minivan after a winter storm Feb. 5, 2014, in Philadelphia. AP Photo
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CHICAGO (CBSNews.com) - The National Weather Service calls this a winter to remember - but the memory of the cost will not be a fond one.

Business analysts estimate the severe winter weather so far this season has cost the economy about $10 billion. That includes, among other things, lost productivity -- and more money going to heating bills and less to the corner restaurant.

All the slush and shivers could slow national economic growth by half a percent this quarter, a significant snowball at an economy that grew only 2.7 percent this year.

Diane Swonk is the chief economist at Mesirow Financial..

"Everybody hibernates when it's really cold. So they're not going out to restaurants. They're not going out to malls. They're not going out to auto dealers. We've already seen auto sales have been affected. They're not looking at new homes," said Swonk.

With their supply chains disrupted, manufacturing hours were down and the construction industry shed 25,0000 jobs.

 

Even in sunny California, a cold snap has caused $440 million in damage to the citrus crop above and beyond what the drought there is doing.

Here in Chicago, where there have been 34 snowy days this winter, business is down and cancellations are up at the trendy Spiaggia restaurant, even though it's Restaurant Week in the city and lots of deals are available.

Assistant General Manager Alexandra Barton blames the weather for the drop in business.

"When O'Hare (International Airport) is shutting down and canceling hundreds of flights, we will absolutely see folks unable to come in from Los Angeles and New York," she said.

And whether it's snow in Atlanta or ice in Dallas, Swonk says all the stormy weather adds up to a minus.

"All of those places that don't usually get hit,  they're getting hit as well, and that's disrupting activity that might have gone on," she said.

The good news is that many economists believe productivity will pick up in the spring and may cover the losses of the winter. But right now, spring seems a long way off.


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