According to the most recent data released and analyzed by the National Association of Manufacturers (NAM), economic growth has ground to an abrupt and unprecedented halt, both in the United States and globally. Chad Moutray, Ph.D., CBE, and Chief Economist at NAM, cited several major indicators that point to the severity of market conditions.
The IHS Markit Flash U.S. Manufacturing PMI declined in April at the fastest rate since March 2009 as the sector struggles with the COVID-19 outbreak and significant demand and production disruptions. At the same time, with many consumer-facing businesses closed and more Americans staying closer to home, the IHS Markit Flash U.S. Services Business Activity Index declined from 39.8 to 27.0, a record low.
Similarly, Eurozone manufacturing activity also fell at the fastest rate since early 2009, with the IHS Flash Eurozone Services PMI Activity Index plummeting from 26.4 to 11.7, a new jaw-dropping record low.
In the Kansas City Federal Reserve Bank’s district, manufacturers reported the strongest decline in activity in the survey’s history, which dates to 1994, mirroring dismal releases from the New York and Philadelphia Federal Reserve Banks in the prior week.
Existing and new home sales fell 8.5 percent and 15.4 percent in March, respectively. Indeed, the housing market—a bright spot in the economy just two months ago—has slowed materially due to the COVID-19 outbreak, just like other segments of the economy.
The Index of Consumer Sentiment plummeted to the lowest level since December 2011, falling from 89.1 in March to 71.8 in April, according to the University of Michigan and Thomson Reuters.
New durable goods orders also reflected weaknesses due to COVID-19, but the declines were not as deep as feared, particularly with transportation (and defense) goods excluded.
And finally, there were 4,427,000 initial unemployment claims for the week ending April 18, with 26.45 million Americans filing for unemployment insurance in the past five weeks as the economic toll of the COVID-19 crisis takes hold. Meanwhile, there were 15,976,000 continuing unemployment claims for the week ending April 11 in this report, a new all-time high. The latest figure suggests that 11 percent of the workforce received unemployment insurance that week, a rate that will continue to increase substantially given the initial claims data.