As parts of America are experiencing their worst winter in 30 years, the severe weather has taken its toll on the US’s economic recovery, the Federal Reserve said Wednesday.



While cold weather and snow gripped much of the country in January and February, consumer spending was hit across the US, according to the Fed’s latest “beige book” report on the state of the economy; manufacturing and construction were also adversely affected. Weather was also cited as a contributing factor to softer auto sales in many areas. While the unseasonable cold did the most damage in agriculture, California’s record drought has also taken its toll on the state’s economy.

The Fed said hiring had notably softened in regions of the country hit by the severe cold. But the rate at which temporary hires were being converted into permanent hires picked up, and the underlying recovery appeared to be continuing. “Many districts continued to note shortages for particular types of specialized, technical skilled labor, such as healthcare professionals and information technology workers. Atlanta and Dallas also noted shortages for freight truck drivers,” said the Fed.



In total, the report mentions “weather” 119 times and “winter” 54 times, calling it extreme, harsh and severe. “Severe” appears 35 times in the report, “cold’ 31 times, “snow” 24 times, and “storm” 15 times.

The report comes before Friday’s monthly snapshot of the US jobs market. The non-farm payroll report, one of the most influential in the economic calendar, will be especially closely watched this month as it follows two disappointing reports. The US added an average of 205,000 per month in the year to November 2013, but December’s reading was only 75,000 and January’s 113,000. Economists polled by Thomson Reuters are expecting the US to have added 150,000 new jobs in February.



The severe winter has especially affected air travel. From December 1 through February 28, 108,600 flights were canceled, almost double the average of previous winters of 57,600, according to a poll by data tracker MasFlight.

Fed chair Janet Yellen told Congress last week that it was too soon to calculate the long-term impact of the extreme weather on the US economy.

The Fed is currently paring back its massive bond-buying economic stimulus program, known as quantitative easing (QE). Currently the Fed is pumping $65bn a month into the economy via QE, but is expected to cut that by $10bn at its next meeting unless the weather proves to have had a serious impact on the recovery.

“That recent weather impacted activity across the country should be no surprise. Numerous reports have suggested weather disrupted housing and manufacturing among other things,” Dan Greenhaus, chief strategist at broker BTIG said in a note to clients. “Simply put, the Fed’s beige book indicates that weather affected nearly the entire economy across the country this winter.”

