The Economic Perspective: “A Taste of What’s to Come”

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.