The winter storm that blanketed large swaths of North America over the weekend is likely to deliver a significant hit to US economic growth in the first quarter of 2026, potentially shaving between 0.5 and 1.5 percentage points off annualized GDP growth, according to Bank of America.
The bank said its initial estimate is based on historical comparisons with Winter Storm Viola, which disrupted large parts of the US in February 2021 and led to a sharp, though temporary, pullback in consumer spending.
Bank of America noted that consumer spending fell 0.9% month-on-month in February 2021 after rising 1.3% in January, though it cautioned that the swing was influenced by factors beyond weather, including fiscal stimulus and seasonal adjustments.
To better isolate the storm’s impact, the bank analyzed its aggregated credit and debit card data, which showed total card spending falling 3.7% year-on-year during the height of Viola, compared with growth of about 6% in the preceding weeks.
After accounting for a rebound in spending in subsequent weeks, Bank of America estimated that at least 0.6 percentage points of consumer spending was lost over a one-month period following Viola, equivalent to a roughly 0.5 percentage point drag on first-quarter 2021 GDP growth. The bank added that the total economic impact may have been larger once weaker cash transactions and other components of GDP were considered, putting the downside risk as high as 1.5 percentage points.
While the comparison is imperfect, the bank said Winter Storm Fern shares several similarities with Viola, including the scale of geographic disruption. Fern has produced heavier snowfall in the US Northeast, which has a higher concentration of higher-income households, though it appears less damaging to energy infrastructure than the 2021 storm in Texas.
Despite the near-term hit, Bank of America said the economic impact from Fern is unlikely to be lasting, with lost output expected to be partially recouped in the second quarter.
“This means there is as much upside to Q2 GDP growth as there is downside to Q1,” the bank said, adding it remains bullish on the broader economic outlook.