Robert Heinlein once wrote that “Climate is what we expect, weather is what we get.” In the same way the business cycle is what forecasters expect, but what we actually get can be thrown off track by other factors. It is easy to point to the first quarter of 2014 of an example where unusually widespread
severe storms in the eastern half of the country knocked the GDP down to -2.1%. A fuzzier issue is the recent west coast dockworkers slowdown. Union workers started the slowdown in early November, but it was not until January that there was a dramatic drop off in work; the port of Los Angeles had 29% less container cargo moved in January 2015 compared to January 2014, Long Beach was down 19%, and Tacoma down 18%. Several respondents to the Purchasing Managers Index survey commented on the problem, including “West Coast port slowdown is getting serious.” It is
hard to evaluate how large an effect this will have on the GDP, but it is likely that much of the slowing in the first quarter will be recovered in the second. It is expected to take up to two months to clear the backlog of ships.
One economic measure that is largely unaffected by minor disruptions is employment. Employment has been growing at a steady pace following the recession. Not surprisingly, construction, which fell steeply during the housing bust, has since grown rapidly. Government employment was not hit very
hard by the recession but has since dropped, down 7.5% in 2014.
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