The economic impacts of COVID-19 have begun to appear in the past few weeks’ data releases.  Given that these impacts have been decidedly negative, the Citi Economic Surprise Index for the US has turned sharply lower.  This index measures how economic data comes in relative to forecasts.  Rising or positive numbers indicate more releases are beating expectations and vice versa.  On March 13th the index peaked, reaching its highest level since early 2018 at 73.8.  It then pulled back off of those highs but was still fairly high in the low 60s all the way up until last Wednesday.  But it then fell out of bed dropping to -1.5 today.

Given the index weights various releases differently, most of the blame for that decline can be put on last Thursday’s initial jobless claims number. Thanks to the massive miss, from Wednesday to Thursday the index fell from 61.7 all the way to 1. While that did not drop the index itself to any new low as it is now back to similar levels as the start of the year, that one day decline was the largest ever as shown in the chart below.   Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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