By contrast, the Fed index pointed to a year-over-year growth rate of 1.6% at the end of February, before the coronavirus epidemic shut down large swaths of the U.S. economy.
To be sure, the economy has been devastated by widespread business closures and the loss of more than 20 million jobs. The second quarter is shaping up to record the biggest decline in gross domestic product at least since World War Two and perhaps ever (quarterly records don’t exist before 1947).
Leading forecaster IHS on Tuesday said the U.S. is on track to contract by an astonishing 27% annual clip from April to June. Such a precipitous decline would be almost three times larger than anything the U.S. economy has ever experienced.
Still, the New York Fed index offers a hint that the pace of economic contraction is slowing.
Congress has rushed trillions of dollars to aid businesses, consumers and households and more emergency funds are on the way. Some states are also taking the first, halting steps to try to open businesses again.
Whether economic growth really does find a bottom soon will depend on how fast the spread of the coronavirus epidemic slows, treatments are developed, and American consumers begin to regain confidence. Those are big uncertainties.
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