Thursday, March 26, 2020

Weekly Economic Index (WEI)

March 26, 2020


Daniel Lewis, New York Fed
Karel Mertens, Dallas Fed
James Stock, Harvard University

The WEI is an index of 7 weekly indicators of real economic activity, scaled to have the units of four-quarter percent change of real GDP.

  • The WEI is currently -4.41, scaled to Q1 4-quarter GDP growth, for the week ending March 21; for reference, the WEI stood at 1.60 for the week ending February 29.
  • Today's news of 3,283,000 new claims for unemployment insurance (seasonally adjusted) last week was worse than already-pessimistic expectations and drove down the WEI for the week ending March 21. The new claims data, along with previously reported declines in consumer sentiment, fuel sales, steel production, and electricity consumption for last week, outweigh continued strong retail sales last week as consumers stockpiled. Today's update represents the first major decline in the WEI as a result of the response to the novel coronavirus, with the weekly value implying 4-quarter GDP growth of -4.4%. This decline is comparable to the decline at the depth of the financial crisis recession.
  • The current WEI implies a 17.8 percent decrease in the Index of Industrial Production (YoY).
  • Data dashboard and .pdf of release

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