Mary: I’m Mary Walden, with economist MW, welcoming you to the economic perspective. Today’s program looks at a taste of what’s to come. Mike, it was recently reported the US economy shrunk by almost 5% in the first quarter. What does this number represent, and is it showing the economic cost of the coronavirus?
Mike: Summary Answer
- GDP – measures aggregate production of all businesses
- Said it shrunk by 5% during that quarter
- Clearly was impacted by the reduction in economic activity by the coronavirus, mainly in March of that three-month period
- Unfortunately, is not the end of the impact
- Comparable measure for the second quarter – April, May, June – which won’t be available until July – will be down much more – probably by at least 20%
- This is because the virus’ economic impact will be occurring over most of that quarter.
- But with a negative for the first quarter already announced, and a negative for the second quarter clearly coming, meets the standard for a recession’
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.