Bank of America predicts winter storm Fern is going to send a chill through the U.S. economy in the first quarter before spending rebounds this spring.
Power outages, flight delays and other widespread disruptions from Fern’s snow, ice and extended bitterly cold temperatures may lower first-quarter GDP by as much as 1.5 percentage points, according to a projection Monday by Aditya Bhave, a U.S. economist for the Charlotte-based bank.
While the storm may cause the permanent loss of some economic output, Bhave predicts that other activity is going to be deferred until the second quarter.
The impact of the storm will likely be “substantial drag on 1Q growth,’’ the economist said. “However, we wouldn’t expect any lasting impact on the trajectory of the economy.’’
He said the outlook remains bullish with “as much upside to 2Q GDP growth as there is downside to 1Q.’’
The projection looks back to the impact of winter storm Viola nearly five years ago on consumer spending and the bank’s credit and debit card spending data.
Consumer and card spending slipped during February 2021 when Viola struck following earlier increases, according to the report. Cash transactions likely fell more sharply.
Ciphering Fern’s impact isn’t precise, the analyst said, because its comparison with Viola “isn’t perfect.’’
“Viola caused significant damage in the South, with extended disruptions to the power grid in Texas,’’ said Bhave, a managing director at BofA Global Research. “News reports suggest that Winter Storm Fern won’t be as disruptive, partly because the region is now better prepared.’’
Even so, Fern “resulted in a lot more snowfall in the Northeast, which has a larger concentration of higher-income households,’’ he said. “So it isn’t clear whether Fern will cause more or less economic damage than Viola.’’
Impacting more than 235 million Americans, Fern resulted in at least 28 deaths, according to a report in the New York Post. It cited police, government agencies and other media outlets. Six people died on a private jet that crashed in Maine, at least seven perished in New York City, and sledding accidents claimed the lives of two teens in Texas and Arkansas.
The year’s first major storm, Fern’s economic punch, followed higher consumer spending late last year, Bank of America said in a separate report. “Consumers ended 2025 on a strong note and tax refunds may provide a further boost to spending over 2026,’’ it said.
In December, total credit and debit card spending per household increased 1.8% year over year, higher than 1.3% in November, the report said. Seasonally adjusted spending growth rose 0.5% month over month.
