The Bronx Chamber of Commerce is worried the retail vacancy rate will skyrocket due to the shutdown caused by the pandemic.

Spencer Kimball | US

The already dismal outlook for economic growth during the current period just got considerably worse.

Gross domestic product, which tallies the sum of goods and services across the economy, is on track to crater 42.8% in the April-to-June period, according to a running measure kept by the Atlanta Federal Reserve.

The tracker, called GDPNow, had been indicating a drop of 34.9% a week ago, but a raft of poor economic data since then caused the central bank district to take down the figure even more. The drop would easily be the worst in the post-World War II era.

On top of all the bad jobs reports recently, the Census Bureau reported Friday that retail sales collapsed 16.4% in April, which was even worse than the 12.3% that economists surveyed by Dow Jones had been forecasting. That came following news Thursday that another nearly 3 million Americans filed jobless claims last week, bringing the running eight-week total during the coronavirus lockdown to 36.5 million.

Economic reports in general have been running lower than even the sharply reduced expectations. The Citigroup Economic Surprise Index, which gauges the data against Wall Street estimates, hit its lowest-ever point at the end of April in records that go back to January 2003.

Taking the data together, the Atlanta Fed now sees personal consumption expenditures, which make 68% of GDP, falling by 43.6% in Q2, down from the May 8 estimate of -33.9%. Gross private domestic investment, which currently is 17% of GDP, is expected to plunge by 69.4%, down from a -62.8% estimate a week ago.

GDPNow can be volatile and is not a forecast per se but rather a running estimate based on real-time data. However, it is only somewhat worse than other prominent estimates.

Goldman Sachs, for instance, recently projected growth to fall 39% for the quarter. The firm, though, sees a big bounce on the other side, with Q3 rising 29%. The New York Fed’s GDP Nowcast is tracking at 31.05%. 

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