The San Francisco Fed said it has developed a Daily News Sentiment Index using language-processing techniques. Using an historical archive of news articles from 16 major U.S. newspapers, researchers were able to gauge the mood of articles discussing the economy from 1980 until the present day.
Researchers found the news sentiment started to fall steadily around Jan. 20, when the first articles mentioning the coronavirus appeared.
In contrast, the Michigan Consumer Sentiment Index, released by the University of Michigan, remained elevated through February.
The news sentiment index then plunged in the first two weeks of March. The Michigan sentiment suffered its fourth-largest one-month decline since 1980 in the same month.
Economists have had a hard time assessing the magnitude of the economic fallout of the coronavirus because hard data is published with lags of weeks or months. But the news sentiment index gives a daily reading. Sentiment readings have shown a link to subsequent economic activity, especially consumer spending.
By late March, the percentage of economics-related news articles mentioning the virus reached 95%. But so far, the news index has not fallen below the low points of the past three recessions. It has held its ground along with a rise in news coverage related to fiscal stimulus legislation, researchers found.
U.S. equity benchmarks had sharp gains Monday on signs the coronavirus pandemic was easing in parts of Europe. The Dow Jones Industrial Average DJIA,
jumped 1,627 points, or 7.7%.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.