An unprecedented drop in economic activity was 'relatively' good news

[EarthFirst]

Data implying a 12% GDP decline is now good news

IHS Markit’s flash reading on business output in April published Thursday hit a record low, with the composite output reading falling to 27.4, the lowest on record. Readings over 50 for this measure indicate expansion and readings below 50 indicate a contraction in activity.

“Private sector firms in the U.S. signaled an unprecedented decline in business activity in April, with manufacturing and service sector companies registering marked contractions of output amid the outbreak of coronavirus disease 2019 (COVID-19),” the report said. After an initial drop in this index to 40.9 in March, April’s data confirms that the bottom is indeed dropping out of U.S. economic activity.

But this largest-ever drop in activity seen from IHS’ report points towards a falloff in GDP growth during the second quarter that is not quite as grim as some economists are forecasting.

On Thursday, the weekly report on initial jobless claims was also released, revealing that another 4.42 million Americans filed first-time claims for unemployment insurance last week. Over the last five weeks, more than 26 million people have filed initial claims. The four-week average of claims is now nine times higher than the financial crisis peak.

https://finance.yahoo.com/news/unprecedented-drop-in-economic-activity-was-relatively-good-news-morning-brief-102721320.html

[Amishman]

1. wall street is betting on a fast economic recovery when things open

I just don't see it. corporate and consumer spending is going to pull back because of depleted savings, fear, and hedging against the possibility of the virus making a resurgence.

[elias7]

2. Yes, I'm confused

There’s been talk of potential recession after a 12 yr bull market before covid. Now that covid has hit and the world economy has shut down, we had a minor market crash (compared to previous recessions) and everyone is talking about a recovery before that has even hit the fan. This makes no sense to me. Do folks not realize that things are not going back to “normal” in a few months? No way the market could have “priced in” what no one wants to believe.

I see potential collapse of so many interrelated industries, yet it seems Wall Street folks are seeing this as a great opportunity to buy low, I guess that’s what happens you socialize big business. The market will always go up, because we’ll always bail it out.