Mild winter may help boost the economy

— -- Some economists give credit for the improving economy to Washington, others to the stock market and still more to the long-awaited bottoming of the housing market.

Others say the key is the weather.

The nation's mild winter has added thousands of jobs this year, boosting crucial businesses such as construction and auto sales.

The question is whether this is a coincidence, as good weather and an improving economy arrive at the same time, or whether the weather effect is the main factor behind the better-than-expected run of recent economic news.

Some things aren't in doubt.

The January unemployment report said that about 206,000 people were out of work because of bad weather, compared with 424,000 workers who normally face weather-related layoffs in January.

And construction, the most weather-sensitive major industry, added 52,000 jobs in the last two months, after adding 32,000 in the prior 12 months.

The question is what that all means.

"It's not a trivial part of the improvement in the last couple of months, but not big compared to the total number of people, even in construction," said Mike Montgomery, an economist at IHS Global Insight, a consulting firm in Lexington, Mass.

"Things that normally would be postponed, weren't. Someone on a business trip this year can get where he wants to go," Montgomery said. "Bartenders and waitresses get more hours of work than normal. The improvement in the economy is real."

On the bearish side is Steven Ricchiuto, chief U.S. economist for Mizuho Securities. He says weather accounts for nearly all the hiring acceleration in the last few months.

With underlying demand not growing fast, he says, recent gains will show up as car sales, housing starts and related hiring that won't happen this spring.

"You're jumping to conclusions based on a few thousand jobs," he said. "When we don't have the sales, housing starts or the employment, everyone will run in the other direction."

Tuesday's report from the Census Bureau on January retail sales, which said overall sales rose 0.4%, while car sales to consumers dropped 1.1%, only added to the confusion.

Economists had relied on earlier reports that automakers in January sold cars at an annual rate of 14.2 million in forecasting that retail sales would rise 0.8% on average.

The drop in auto sales may mean that carmakers sold more vehicles to corporate fleets in January, and fewer to consumers than had been thought, Bank of America Merrill Lynch economist Michelle Meyer said.

"The data is so noisy, you just can't tell," said Patrick Newport, U.S. economist at IHS. "You won't be able to get a good read on the effect of weather until at least May."