4/20: MetroIntelligence Economic Update by P. DUFFY

March Leading Economic Index fell 6.7 percent to 104.2

In March, the US Leading Economic Index (LEI) registered the largest decline in its 60-year history, falling 6.7 percent to 104.2. The deterioration was broad-based, with the largest negative contributions coming from initial claims for unemployment insurance and stock prices. The sharp drop in the index reflects the sudden halting in business activity as a result of the global pandemic, and suggests the US economy will be facing a very deep contraction, at least in the short run.



March Chicago Fed National Activity Index declined to -4.19

The Chicago Fed’s National Activity Index fell to -4.19 for the month compared to 0.06 in February, or near the bottom it hit over 19 months during the 2007 to 2009 Great Recession. Of the 85 measures of economic activity, which make up the index, 65 of them made “negative contributions” during the month. An index value of 0 means the economy is growing at about its estimated trend rate, whereas values below -0.7 are associated with an increasing likelihood of a recession.



Gallup: 70 percent of Americans believe economy is in a recession or depression

Seven in 10 Americans now believe the U.S. economy is in either a recession (40%) or a depression (30%). The combined percentage has increased by 12 percentage points in the past week, and by 15 points since Gallup’s first measurement in late March.



Gallup: 55 percent of stock market investors waiting out the current storm

55 percent of U.S. investors — those with $10,000 or more invested in stocks or bonds — see the current stock market environment as a time to hold what they have and wait for the market to come back. Meanwhile, far more see it as a time to purchase more stock while prices are down (34%) than as a time to decrease holdings to protect from further losses (4%).



Gallup: 20 percent of Americans would immediately return to normal activities once restrictions lifted

When asked how quickly they will return to their normal activities once the government lifts restrictions and businesses and schools start to reopen, the vast majority of Americans say they would wait and see what happens with the spread of the virus (71%) and another 10% would wait indefinitely. Just 20% say they would return to their normal activities immediately.