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Weekly economic review & outlook
Growth drops, but the plunge is still ahead

MAY. 04, 2020

You Need to Know

Week in review

First quarter growth dives but the worst is yet to come

Real GDP declined at an annualized rate of 4.8 percent as consumer and business activity stopped in response to early stay-at-home mandates.

Manufacturing sector contracts sharply

The ISM manufacturing index decreased to recessionary levels in April as new orders and production activity came to a halt at a record pace.

Week Ahead

Forecasts

ISM nonmanufacturing index expected to drop to an all-time low

The ISM nonmanufacturing index is expected to hit an all-time low after business activity was at a relative standstill for the month of April.

Nonfarm payrolls set for record contraction

The record jump in weekly unemployment claims suggests that nonfarm employment will fall at an unimaginable pace – with a similar jump in the unemployment rate.

Even with the economy expanding solidly until mid-March, the economic shutdown in the second half of the month still took a big toll on growth. Real GDP fell at an annualized pace of 4.8 percent in the first quarter, the largest drop since the heart of the Great Recession in the fourth quarter of 2008. There have been only seven quarters with weaker growth in the post-WWII period (plus one that was equally as weak).

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