Economic IndicatorsTop News

Chicago Fed economic index takes recessionary plunge in March

imageEconomy10 hours ago (Apr 20, 2020 08:55AM ET)

(C) Reuters. Stores on 125th Street in Harlem are closed, as retail sales suffer record drop during the outbreak of the coronavirus disease (COVID19) in New York

By Howard Schneider

WASHINGTON (Reuters) – A Chicago Federal Reserve measure of the national economy plunged to recessionary levels in March as the country responded to the coronavirus pandemic, a broad and swift turnaround from growth that had been well above trend just weeks before.

The drop crossed sectors, and in a single month pushed the Chicago Fed’s National Activity Index near the bottom it hit over 19 months during the 2007 to 2009 Great Recession (for a graphic see

The Chicago Fed combines 85 measures of economic activity into one index. In March 65 of them made “negative contributions,” the bank said in an understated press release headlined “Index suggests economic growth decreased substantially in March.”

The overall index fell to -4.19 for the month compared to 0.06 in February in a month where factory output dropped and employment cratered in the face of widespread shut downs to keep people home and stem the spread of the COVID-19 disease.

An index value of 0 means the economy is growing at about its estimated trend rate.

More notably, the drop in March was enough to pull the 3-month moving average of the index down to -1.47 from -0.2 in February.

Values below -0.7 are “associated” with “an increasing likelihood of a recession,” the Chicago Fed said.

There is little disagreement among economists or Fed officials that the U.S.’s recordbreaking, decade long economic expansion ended in March, when an unprecedented public health emergency forced local and eventually national officials to encourage or order “social distancing.”

The issue now is how long the downturn might last, and how fast households and businesses will feel comfortable returning to normal economic life after the virus is controlled.

Chicago Fed economic index takes recessionary plunge in March

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!