The latest report on the state of economy has that dreaded word popping up again:recession.
The last time we experienced a drop that severe was in 2008.
It gets measured quarterly.
Consumer spending hasnt declined this fast since 1980, according to the Commerce Departments report.
Then the coronavirus showed up and changed everything.
But a crappy GDP alone does not indicate a recession.
Its one of the factors that contributes to it.
Heres the S&P 500, for a quick and cursory look at the stock market.
Its topsy turvy, but not dire.
Now, unemployment, thats a big yikes factor here (which probably does not surprise you).
But we dont have the whole picture yet.
While we have data about new unemployment benefit filings, we dont yet have an updated unemploymentrate.
And we wont get the April report untilMay 8.
But the GDPs role cant be ignored here because it in part measures consumer spending.
And you know what consumers arent doing a lot of right now?
And that lack of consumer funds floating around in the economy is a major blow.
Thats why the GDPs severe swing seems like such a clear indicator of economic distress right now.
The quarter to really watch out for?
The one were in now, said Mark Hamrick, senior economic analyst atBankrate.
This is the impact as the lockdown in response to the Covid-19 pandemic began in March.
It is a bit like a chain reaction accident, Hamrick said.
One serious accident followed by a head-on collision.
The rest is just speculation, at least for a few more months.
