How bad was the winter? Really bad—enough to chill the Federal Reserve's growth estimates.
The Fed's policy statement on Wednesday was little changed, but its economic projections contained a rather shocking revision for 2014's gross domestic product figures. The central bank sharply lowered them, from 2.8– 3.0 percent, to 2.1– 2.3 percent.
Even for a central bank that has a dismal record as an economic forecaster, this is a pretty big downward revision. Does the Fed think that economic activity is deteriorating, even as it tapers?
No. This revisions reflects the dismal downturn in activity that took place over the winter. Remember, the Fed only adjusts these numbers quarterly, and the data on the winter was not available in March. What matters is the estimates on the unemployment rate was lowered, to 6.0– 6.1 percent from 6.1–6.3 percent.
On the other hand, the Fed said "labor market indicators generally showed further improvement." That's a positive, as was the wording in the first paragraph of the Fed statement. Growth in economic activity has "rebounded" instead of "picked up" from April, and business fixed income investment has "resumed its advance;" in April, it had "edged down."
This may seem nit-picky, but nit picking is what Fed statements are all about. In addition, expectations for inflation remain little changed.
Most importantly, there is nothing that suggests the Fed is considering changing its timetable for lifting rates. That is still planned for well into 2015.
--By CNBC's Bob Pisani