MNI DATA PREVIEW: Deepest US GDP Fall Since 2009 Seen For Q1

By Ryan Hauser

     WASHINGTON (MNI) - U.S. GDP in the first quarter of 2020 is expected to

show the deepest contraction in over a decade amid COVID-19's impact to global

supply chains, an oil shock and stay-at-home orders.

     The Bureau of Economic Analysis is set to release results for the first

estimate of Q1 GDP on Wednesday morning, with markets expecting a 3.8% drop

according to the Bloomberg median estimate. The downturn will likely mark the

first negative reading since Q1 2014, when GDP fell 1.1%.

     The report is only a harbinger of worse readings to come, with the

Congressional Budget Office predicting a second-quarter drop close to -40% at

annualized rates. The IHS Markit composite PMI has already hit a record low of

27.4, and the string of millions of weekly jobless claims has persisted

throughout this month.

     On Tuesday the Census Bureau's report on the advance goods trade gap showed

a much wider than expected deficit for March of USD64.2 billion as both exports

and imports fell. 

     Amherst Pierpoint chief economist Stephen Stanley called this a "double

whammy in terms of cutting into Q1 GDP." JPMorgan dropped its Q1 GDP estimate to

-11.2%, suggesting the first estimate could be worse than anticipated.

--MNI Washington Bureau; +1 202 371 2121; email: ryan.hauser@marketnews.com

[TOPICS: MAUDS$,MAUPR$,M$U$$$]