A new chart shows the US economy has already plummeted to Great Recession lows
- The New York Federal Reserve's Weekly Economic Index shows the US economy has already plunged to Great Recession lows.
- The index measures the expected GDP percentage change based on a number of factors, including unemployment claims and estimates of gasoline and diesel sales.
- Unemployment claims were a record high 3.3 million for this week. The Fed also cited a "sharp decline in consumer confidence and fuel sales."
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It's feeling a lot like 2009 again, at least according to the New York Federal Reserve.
The New York Fed computes a Weekly Economic Index to measure economic activity in real time, and its most recent calculations show the US economy has already plunged to Great Recession lows amid the coronavirus pandemic.
To identify the economic impact on a weekly basis, the New York Fed creates an index out of a variety of measurements: Unemployment claims, retail sales growth, temporary employment data from staffing companies, estimates of raw steel production, electricity output in the US, and estimates of gasoline, diesel, and jet fuel sales. The measurements are then used to estimate GDP growth.
For instance, a reading of 2% on the index in any given week means that if that week's conditions persisted for an entire quarter, the GDP would grow by 2% relative to the previous year.
As of March 21, the expected change in GDP plunged to -4%. That was last seen in 2009 - the lowest low of the Great Recession.
We don't have access to all the data the New York Fed crunched, but the week ending March 21 saw an unprecedented spike in jobless claims. A record 3.3 million unemployment claims were filed that week. The New York Fed also cited a "sharp decline in consumer confidence and fuel sales," as a driving factor.
US jobless claims are forecasted to hit a second straight record this week, meaning the next Weekly Economic Index will look grim as well. They're just a hint of how rough it is out there.
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