We have learned that China, the world’s second-largest economy contracted by nearly 10% in Q1.  The US has lost in less than two months all the jobs gained in the record expansion.  The central bank of Canada, the 10th largest economy, warned that its output could fall by 30% in the first half.  Europe’s automakers’ association estimates that sales imploded by 55% in March, twice the pace at the worst of the Great Financial Crisis. Investors know that the shutdowns mean those claiming welfare benefits, unemployment insurance are surging.   Benefits have generally been increased and extended. Some countries offer to subsidize wages of employees whose employer reduces their hours rather than letting them go.  The US has offered loans that turn into grants to businesses that retain or rehire employees.  The early April manufacturing surveys conducted by the New York and Philadelphia Federal Reserve Banks (-78.2 and -56.6) provide more color of the depth of the economic contraction that is underway.

It is hardly surprising that activity slows down dramatically when broad parts of the major economies have shut down.  A coin is dropped from the top of a 50-story building.  Snapshots of what it looks like at the 35th floor and again at the 10th floor may be interesting for a photographer, or physicist but it makes little difference.   And so it is with the economic data, except in slow motion.  It is going to get worse.  More important for investors and businesses is when the turn comes.  That is, of course, predicated in part by the easing of restrictions on movement, but it is not as simple as that due to complex and opaque supply chains.