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Is Warm Weather Putting a False Shine on the Economy?

Is Warm Weather Putting a False Shine on the Economy?
Photograph by Ghislain and Marie David de Lossy

Stocks jumped on Tuesday off news that February retail sales rose 1.1 percent from January, the best monthly gain since September 2011. The Standard & Poor’s 500-stock index closed up 1.8 percent, and the Dow Jones industrial average breached the 13,000 mark again with a 217-point gain. Outside of gas stations, which grew sales by 3.3 percent in February on the back of higher gasoline prices, consumers increased spending the most on cars and clothes. Auto sales were up 1.6 percent in February compared with a month earlier, and were 6.9 percent higher than a year earlier. Consumers are now buying cars at the fastest pace in four years. Shares of General Motors rose 2.68 percent on Tuesday. Consumers drove retail clothing sales up 1.8 percent for the month, adding steam to shares of Gap and Target.

Coupled with last week’s strong jobs report, the retail numbers seem to add further fuel to the view that the recovery is becoming stronger by the day. But have you looked outside lately? Chances are it’s unusually warm where you live. This is causing some analysts, even bullish ones, to start casting a more skeptical eye on all this sunny economic data. They say the unseasonably warm weather we’ve had this winter is making the numbers look better than they are, and is actually stealing economic activity from the spring.