At least one-quarter of the U.S. economy has suddenly gone idle amid the coronavirus pandemic, according to Moody’s Analytics. In the roughly three weeks since the state-imposed closures due to the outbreak, output has fallen roughly $350 billion. This is an unprecedented shutdown of commerce that economists say has never occurred on such a wide scale, WSJ reported.
- Metro areas drive the economy: While 8 in 10 U.S. counties are under lockdown orders, they represent nearly 96% of national output. In Manhattan output is down 25%.
- The upshot: U.S. daily output has fallen roughly 29%, compared with the first week of March, just before the spate of closures. Moody’s doesn’t believe the 29% monthly drop in daily output will be sustained over two more months. If it did, gross domestic product would fall at a roughly 75% annual rate in the second quarter. Chief economist Mark Zandi believes many counties will reopen before the summer and projects a 30% annualized decline in second-quarter GDP.
- Worth Noting: The study estimates that close to 90% of the hotel industry is shut down nationwide, while only 10% of financial-services output is shut down. Real estate and retail also stand out as industries getting hit particularly hard.