The coronavirus capsized what had been the longest expansion in US history. Now it’s a long wait to see how far the economy is sinking before it hits bottom.
Some hopeful signs appeared last week as two reports showed that consumer confidence leveled off towards the end of April, largely on the faltering hope that the economy would start to rebound during the summer. Another survey found that Americans believe that four of the five jobs lost due to the return of the coronavirus.
“I think there will be a longer adjustment process this summer,” said Dave Donabedian, chief investment officer, CIBC Private Wealth Management. “The biggest question is when will these companies reopen their customers when they show up. And the workers want to come back. “
Lily: Why the recovery of the US economy after the coronavirus is likely to be long and painful
But it’s in the future. The immediate present also shows that the economy is descending to depths that it has not known at least since the Great Depression of the 1930s.
Lily: 26 million Americans and more lost their jobs due to coronavirus
The first glimpse of gross domestic product in the first quarter, for example, should show a 3.3% drop in economic growth, according to a MarketWatch survey. Such a drop would be the deepest since 2009 during the Great Recession, but it paled compared to an expected fall of 25% or more in the second quarter.
See:MarketWatch economic calendar
Next week, the most recent results on the performance of the US economy in the second quarter will be released.
Auto sales, manufacturing activity and consumer confidence are all expected to fall in April and several million more people are likely to have applied for unemployment benefits, bringing job losses during the pandemic to almost 30 million.
Lily:26 million Americans and more lost their jobs due to coronavirus
As well:Millions of workers who have applied for unemployment benefits still do not receive money
The Federal Reserve is also expected to hold one of its regular political meetings, and President Jerome Powell will brief the public afterwards. The central bank has already launched a blizzard of strategies to keep the economy afloat, potentially putting trillions of dollars into action.
Lily:Durable goods orders fall 14% in March as coronavirus begins to bite
Powell is unlikely to remove other weapons from the Fed’s growing arsenal on Wednesday, but Wall Street
can’t wait to hear what he has to say about a potential recovery later this year. So far, he has adopted a cautiously optimistic tone, but this is no longer a widely held opinion.
See: Here’s a Breakdown of Fed Rescue Programs to Maintain Credit During the Coronavirus Pandemic