Snow storms threaten to chill US economy

A man walks past the New York Stock Exchange in New York's financial district February 13, 2014.[Photo/Agencies]

February isn't looking much better. Some dealers lost power or had no customers for two or three days this month.

Last month, consumers spent less on clothing and furniture. Department store sales extended a decline after a weak holiday shopping season. Even online shopping _ the fastest source of retail spending growth year-over-year _ fell 0.6 percent last month.

When Americans did buy more, much of the increase was at gas stations, and that was because of rising prices. Their purchases of building materials and groceries also rose.

Evidence of a slowdown is a deflating sign after the economy had rounded into January fanned by momentum gathered in the second half of 2013. Economic growth achieved a solid annual rate of 3.2 percent in the October-December quarter after an even better 4.1 percent rate the previous quarter.

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The forecasting firm Macroeconomic Advisers responded Thursday to the drop in retail sales by reducing its estimate of growth this quarter to a 1.7 percent annual rate from an earlier forecast of 1.9 percent. Moody's Analytics cut its forecast to a 1.9 percent annual rate from 2.2 percent.

Ryan Sweet, an economist at Moody's Analytics, said weather likely put a "noticeable dent" into growth. He estimated that it shaved up to a full percentage point from first-quarter expansion. He added, though, that the expiration of extended unemployment benefits at the end of 2013 and reduced food stamp benefits also hampered retail sales.

Several other economic reports suggest that growth slowed. Factories received fewer orders in December. Signed contacts to buy homes have plummeted to their lowest level in more than two years.

And the past two monthly job reports were sluggish. Only 113,000 workers were added in January. That's slightly better than the 75,000 jobs for December. But average job creation for the past two months combined has been about half the pace of average monthly job gains over the past two years.

There are also signs that the momentum at the end of last year was weaker than initially thought.

Retail sales for December were revised downward in Thursday's report. What was initially a 0.2 percent gain was revised to a 0.1 percent loss. Some economists suggested that growth during the October-December quarter would be slightly downgraded from its initial 3.2 percent annualiz increase.

As a result, the pace of retail sales growth over the past 12 months has slowed. Purchases have risen 2.6 percent compared with January 2013.