In 2013, I wrote an article discussing comments made by Russ Koesterich, CFA, regarding the Chicago Fed National Activity Index (CFNAI). Given this economic indicator just crashed by the most on record, it is worth reviewing his comments. To wit:

“While economic numbers like GDP or payroll reports garner the headlines, the most useful statistic often goes ignored by investors and the press.”

On Thursday, the Bureau of economic analysis released revisions to the GDP report for the first quarter of 2020. It fell from a 2.3% annual real growth rate in the 4th quarter of 2019 to a -5% rate in the first.

CFNAI, #MacroView: CFNAI Economic Indicator Crashes Most On Record

Importantly, the decline in the first quarter only encompassed 2-weeks of the economic shutdown. Considering the entire month of April was a “bust,” we already have a good idea Q2-2020 GDP will be substantially worse.

To gauge just how bad it will be, we could look at the New York or Atlanta Federal Reserve’s real-time GDP trackers. We are currently tracking more than a 30% decline in the second quarter, which is where we derived the estimate in the chart above.

CFNAI, #MacroView: CFNAI Economic Indicator Crashes Most On Record

Regardless, we are discussing unprecedented numbers going back to 1947 when the tracking of the data began.