Winter storm Fern cuts US GDP by up to 1.5% in Q1
Bank of America forecasts $105-115 billion economic loss as storm disrupts travel, energy production and retail spending
Winter Storm Fern is expected to reduce United States economic growth in the first quarter of 2026 by as much as 1.5 percentage points, according to Bank of America analysts, as severe weather disrupts travel, energy production and consumer spending across much of the country.
The bank projects the storm will cut annualized GDP growth by 0.5 to 1.5 percentage points in the first quarter, with total economic damage estimated between $105 billion and $115 billion. The impact, while substantial, is viewed by analysts as temporary rather than structural to the economy.
"The economic damage from Winter Storm Fern is unlikely to be long-lasting," Bank of America analysts noted in their assessment, drawing parallels to Winter Storm Viola in February 2021 that caused a sharp but temporary decrease in consumer spending. The bank anticipates a potential upside to second-quarter GDP growth as economic activity rebounds from weather-related disruptions.
Energy markets have reacted sharply to the storm's impact on production and demand. US natural gas futures surged approximately 18% to above $6 per million British thermal units, while JPMorgan analysts estimated a production cut of about 250,000 barrels per day in US oil output. Brent crude increased to $65.31 and WTI crude rose to $61.34, with both benchmarks recording weekly gains of 2.7%.
The storm, which developed around January 22 and affected vast areas from northern Mexico to the northeastern United States and Canada, caused widespread disruption to daily economic activity. More than 17,000 flights were canceled or delayed, with over 10,500 US flights grounded on Sunday alone and nearly 4,000 additional cancellations on Monday. More than 1 million utility customers initially lost power, with over 800,000 remaining without electricity as of January 26.
The retail sector, particularly dine-in restaurants and discretionary brick-and-mortar stores, is forecast to experience a revenue headwind in the first quarter as severe weather keeps consumers at home. Analysts at Seeking Alpha projected the massive winter storm could impact Q1 restaurant earnings, noting that reduced foot traffic typically translates to lower same-store sales for restaurant chains during significant weather events.
Bank of America noted that while Fern appeared less disruptive to power infrastructure than the 2021 winter storm, it delivered heavier snowfall to the Northeast—a region with a higher concentration of high-income households—potentially amplifying the economic impact through reduced consumer spending in wealthier areas.
At least 15 fatalities have been attributed to the storm, according to reports, with frigid air expected to persist into early February across many regions. The human toll, combined with the economic disruption, has prompted officials in 18 states to declare emergencies as recovery efforts continue.