Coronavirus savages U.S. economy in first quarter; bigger hit still to come
Begin today as I said with a little bit of cause and effect in which we pair this morning's report on first quarter economic growth spoiler alert. There wasn't any with this afternoon's press conference by Federal Reserve Chair. Jay Powell from the good people at the Commerce Department came data this morning. Showing Gross Domestic Product the sum and total of goods and services. This economy produces falling four point eight percent in the first quarter you dig into the fine print as we are want to do and you see household spending was down about seven and a half percent. Purchases of services fell more than ten percent. Business equipment spending fell more than fifteen percent. I could go on but I gotTa let Mitchell Hartman. Have a turn here. The economy was cranking along in January and February then in early March we started to hear warnings about the need for covert nineteen social distancing and statewide lockdowns. Initially that sent consumers out shopping to stock up including at Tom Butchers music shop in Seattle. You know they really wanted to get some music instruments toys. Maybe it's occupy themselves but by the middle of March. His store was shut down and most of our business just disappeared multiply that by tens of millions of businesses across the country and says capital economics. Paul Ashworth the economy just found for clear from we went from everything being enclosed. It's not just stores and restaurants in the like spending on healthcare is down to says University of Michigan Economist. Betsey Stevenson to make room for Kovic patients. Hospitals really had to shut down a lot of nonessential treatment. No keep in mind. These declines happened in the last three weeks of the quarter. The economic shutdown really took hold in April and Paul Ashworth predicts declining. The second quarter was much become the first quarter. We're thinking it's somewhere around forty percent on the plus side Ashworth notes. Some states are reopening. People are getting stimulus checks and unemployment and small business loans but that prediction of a forty percent decline in GDP. This quarter already includes all that stimulus money flowing in.