Bank of America analysts expect Winter Storm Fern to impose a measurable short-term drag on U.S. economic activity, estimating a reduction in first-quarter GDP growth in the range of 0.5 to 1.5 percentage points.
In a client note, BofA economist Aditya Bhave said the team is using the experience of Winter Storm Viola in 2021 as a reference point, arguing that "past is precedent." Both storms, Bhave noted, prompted winter weather advisories across roughly half the country and were followed by sharp pulls in consumer spending during the affected period.
Bhave pointed to February 2021 data showing spending fell 0.9 percent month over month after a 1.3 percent rise in January. He cautioned, however, that the sharp swing around that episode was "probably not entirely due to Viola," because fiscal stimulus and seasonal patterns had boosted January outlays.
To better isolate the weather-related effect, BofA aggregated credit and debit card data. The bank found card spending was down 3.7 percent year over year in the week ending February 19, 2021, compared with a trend of roughly plus 6 percent year over year in earlier weeks. After accounting for an ensuing rebound in later weeks, BofA judged that at least 0.6 percentage points of spending were lost over a one-month span, a reduction equivalent to a 0.5-point drag on first-quarter 2021 GDP.
Bhave added that the full impact of Viola may have been larger than this card-based estimate suggested, given a steeper decline in cash transactions at the time and broader disruptions that likely affected other GDP components beyond card spending.
Fern's profile, the analyst said, differs from Viola in several respects. While Fern appears to have been less disruptive to power infrastructure than Viola, it brought heavier snowfall to the Northeast, a region with a higher concentration of high-income households. These countervailing features contributed to BofA's initial 0.5 to 1.5 percentage point estimate for the hit to first-quarter 2026 growth.
Despite the projected near-term setback, Bhave expressed the view that the damage is unlikely to be enduring. He added that "there is as much upside to 2Q GDP growth as there is downside to 1Q. We remain bullish."
What this means
- Consumer spending is the primary channel through which the bank expects the storm to shave growth, reflecting observed declines in card transactions during comparable past storms.
- Regional differences matter: heavier snowfall in the Northeast could amplify spending effects in higher-income areas, while less impact on power infrastructure may reduce broader economic disruption compared with past storms.
- Measured rebounds in subsequent weeks could offset some of the initial loss, supporting the view that the hit will be short-lived.
Data and limitations
BofA's assessment draws heavily on card spending trends observed around Winter Storm Viola and uses that episode as a benchmark. The bank acknowledges that the earlier episode was influenced by factors such as fiscal stimulus and seasonal volatility that complicate a clean attribution of the spending swing to weather alone.