As long winter continues, few green shoots for economy

Economics is a mugs' game -- just ask economists. As Ed Yardeni, a veteran practitioner of the dismal science and hawk-eyed observer of the financial scene, quipped in a recent client note, "Economists have a genetic predisposition to forecast. Since they are rarely right, they also tend to forecast often."

For now, that unrelenting blizzard of forecasts paints a fairly optimistic picture about where the economy is headed. Most economists still think GDP will advance by 2.5 percent this year, or perhaps a tick more, which would be a major improvement over 2013.

In part, that view stems from the unrelenting blizzards and Arctic winds that are keeping shoppers, home buyers and anyone else with a grain of sense at home and out of the cold. After all, the thinking goes, the flowers have to bloom eventually, and when they do the dewy spring air will bring consumers back to Main Street to renew the spending they put on hold this winter.

Comforting thought, and previous bouts of nasty weather suggest it's probably true. A few green shoots are also starting to appear. Perhaps the greenest: Small businesses, while still cautious about the future, are starting to hire. That's an important, if tenuous, sign that these employers foresee better times.

For now, though, the immediate forecast is noticeably chilly. Employment growth, which has missed expectations by a mile for two straight months, is likely to be weak when the U.S. Labor Department on Friday reports jobs data for February.

Many economists also predict that first-quarter growth will top out at a tepid 2 percent, while others think it could sink even lower. Further denting spirits, the federal government said Friday that the economy expanded much more slowly in the final three month of 2013 than initially estimated. Other key sectors, notably retail and manufacturing, are gearing down, while businesses are pulling back on all the stockpiles they were building up a few months ago when the economy seemed to be emerging from hibernation.

Asked last week by lawmakers to what extent the weather was chilling the economy, Federal Reserve Chair Janet Yellen demured wisely. "Part of that softness may reflect adverse weather conditions, but at this point it's difficult to discern exactly how much," she told the Senate Banking Committee.

Even in keeping her powder dry, though, Yellen's remarks are troubling. Notably missing from her assessment was the Fed's previously more optimistic view that the economy is on the rise.

That's the rub, of course. As the Fed chairman would no doubt concede, economists are no better at predicting the state of the economy six or nine months out than weather forecasters are at spotting any hurricanes likely to lash the U.S. later this year.

Monday, March 3
- Personal income and outlays (U.S. Department of Commerce)
- Construction spending (U.S. Department of Commerce)
- ISM factory report (Institute for Supply Management)

Tuesday, March 4
- ICSC/Goldman Sachs weekly chain-store survey

Wednesday, March 5
- Mortgage Bankers Association index
- ADP employment report
- ISM non-manufacturing index (Institute for Supply Management)
- Federal Reserve Beige Book

Thursday, March 6
- Weekly jobless claims (U.S. Labor Department)

Friday, March 7
- Federal employment report (U.S. Labor Department)
- Consumer credit (Federal Reserve)