Warmer winter days boosted economic activity, but that is so last month.
Notice how the flowers in your garden can't quite figure out what season it is? The warm winter got them going early, and the current seasonal temps are confusing everything.
It's kind of like the economy.
The latest jobless claims data, coming on the heels of a lackluster nonfarm payrolls report, suggest that winter economic reports may have been distorted by the warm weather, and late March and April may be payback time - not necessarily indicative of a big slowdown in the recovery, but a definite ratcheting down of its pace.
"We would offer investors the following weather map," wrote the fixed-income strategists at Bank of America Merrill Lynch in a note to clients. "Since March is partly a winter month and the March weather was also mild, we would expect the weather payback to be limited in March and grow in April." [emphasis mine]
That's bad news for the dollar. Fed officials like Vice Chairwoman Janet Yellen are taking a dim view of the state of the economy, suggesting it will be some time before Fed policy supports a stronger buck
"We expect US monetary policy to err on the side of supporting the economy (dovish) and accordingly should remain a medium term weight against the U.S. dollar," says Camilla Sutton, chief currency strategist at Scotia Capital.Page 1 of 2 | Next Page