U.S. output decline over last 3 weeks akin to Indiana disappearing for a year, economist says

Economic-analysis firm Moody's Analytics took a look at every county in the United States to estimate how the novel COVID-19 coronavirus pandemic has affected economic output. The results weren't pretty.

Government-ordered shutdowns of non-essential businesses have led to daily output declines in most counties, whether it be large ones like Los Angeles County or smaller ones in rural areas. Overall, the firm estimates the nation's daily output is down 29 percent from the first week of March before most businesses closed. In terms of dollars, that's $350 billion, which is reportedly more than triple the size of the decline in the weeks following the Sept. 11, 2001 terrorist attacks. Mark Zandi, Moody's chief economist, said the drop-off is akin to Indiana disappearing for an entire year.

"This is a natural disaster," said Zandi. "There's nothing in the Great Depression analogous to what we're experiencing now."

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If things continue on the same path, there would be a 75-percent decline in the second quarter, but Zandi is mostly aligned with other analysts who think business will eventually pick back up, preventing such a disastrous fate from coming to fruition. Still, The Wall Street Journal notes, Moody's likely underestimates the total hit of the shutdown because it only focuses on business closures and didn't account for a drop in demand resulting from increased unemployment and the pending loss of household wealth. Read more at The Wall Street Journal.