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A spring-loaded economy?

By Mark Hamrick ·
Monday, February 24, 2014
Posted: 6 am ET

During the severe winter that much of the U.S. has been enduring, numerous economic reports have largely been shoveled and dumped into a snow heap. Lackluster readings on jobs, retail sales, housing starts and home sales have been shrugged off by economists as reflecting the chill of ice and snow storms and freezing weather across much of the U.S.

The trouble is, we don't have a good gauge of how and when things will start looking normal again.

While part of the nation warmed up last week, the February jobs report -- due March 7 -- is still at risk of being blurred by the weather.

So, like just about everyone else (other than ski resort operators), economists are looking forward to the spring. When consumers and the rest of us come out of hibernation, the numbers crunchers will hope to get a more accurate reading of the economy's true temperature, or growth.

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In the meantime ...

Four reports are due this week:

  • The Conference Board releases February consumer confidence data, Tuesday at 10 a.m. (all times Eastern).
  • The Commerce Department releases January new home sales, Wednesday at 10 a.m.
  • The Commerce Department releases revised fourth-quarter gross domestic product, Friday at 8:30 a.m.
  • The University of Michigan releases February consumer sentiment, Friday at 9:55 a.m.

Two of those reports are particularly worth watching because they will peer into the mindsets of consumers, notes economist Joel Naroff. In the Conference Board's last report on consumer confidence, released in late January, consumers' feelings about the current situation and their expectations for the future improved. As a result, the closely-followed index saw its second straight monthly increase overall.

But the big picture may not be quite as encouraging. Since we're already about two-thirds of the way through a frosty first quarter, Naroff, the founder of Naroff Economic Advisors, says he wouldn't be surprised if growth for the quarter has been cooled all the way down to 1.5 percent. But because of the weather distortions, he's ready to dismiss a low reading. "I don't think anybody other than a politician is going to think a whole lot about it," he says.

You've been warned: Get ready for a next round of the Washington blame game involving what the economy is or isn't doing.

Economy coiled for the spring?

If the bad weather merely delays significant hiring and spending until the second quarter, then watch out. Naroff says growth in the next quarter come in as strong as 4.5 percent or 5 percent. If, on the other hand, we go back to only modest or sub-par growth, there could be a fair amount of disappointment, including among investors.

Retail industry expert Michael Niemira says spending might very see a burst as the tulips start popping up through the soil. "I suspect that consumers are tired of the bouts of adverse weather, and I would expect that there will be a sharp rebound as spring gets in the air," says Niemira, chief economist for the International Council of Shopping Centers.

This week in business history

Even if you don't have a celebrity's deep pockets and can't afford Louis Vuitton, you might at least have heard of the fancy designer brand. Did you know that the real Louis Vuitton died over a century ago, on Feb. 27, 1892? He founded the famed French fashion house in 1854. Today, parent conglomerate LVMH is a luxury brand powerhouse behind products including clothing, cosmetics, jewelry, watches and wines.

Have you been holding back on purchases because you've been staying inside? Or are you doubling-down on Louis Vuitton products? Let me know what you think.

Follow me on Twitter: @Hamrickisms.

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