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Newsletter: Economy Contracts, Confidence Plunges


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Newsletter: Economy Contracts, Confidence Plunges

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.It’s a big day for economic news, starting with first-quarter GDP in the U.S., heading to the Fed’s policy statement and press conference, and wrapping up with China’s official manufacturing index. Jeff Sparshott here to help…

Newsletter: Economy Contracts, Confidence Plunges

This is the web version of the WSJ’s newsletter on the economy. You can register for daily shipment here

It’s a wedding day for financial news, starting with first-quarter GDP in the U.S., heading to the Fed’s policy statement and press conference, and finishing up with China’s main production index. Jeff Sparshott here to help get you prepared.

Decrease and Fall

The coronavirus pandemic’s spread in the U.S. likely activated the biggest quarterly economic contraction in over a decade. Economists expect first quarter gross domestic item, the broadest step of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 3.5%in the first 3 months of the year. That would be the steepest dropoff since the depths of the last recession– but it’s just the start of what forecasters expect is a lot more extreme decrease in the second quarter, Harriet Torry reports.

The Commerce Department releases its advance report for first quarter GDP at 8: 30 a.m. ET. We’ll have an unique edition of the newsletter with highlights and insights later on today.

WHAT TO VIEW TODAY

U.S. gross domestic product is anticipated to contract at a 3.5%speed in the first quarter. (8: 30 a.m. ET)

U.S. pending-home sales for March are anticipated to fall 13.5%from the previous month. (10 a.m. ET)

The Federal Reserve launches a policy statement at 2 p.m. ET and Chairman Jerome Powell holds a press conference at 2: 30 p.m. ET.

Japan’s commercial production for March is out at 7: 50 p.m. ET.

China’s main manufacturing index for April is out at 9 p.m. ET.

Note: This is a partial list of events and subject to change.

LEADING STORIES

Walk the Line

Federal Reserve officials will update their evaluation of the contracting U.S. economy Wednesday and could define how their policies will support an eventual recovery Few brand-new policy statements are anticipated after the conclusion of their policy conference Wednesday, putting attention on Chairman Jerome Powell’s subsequent news conference. With the possibility of a sharp financial rebound fading, Mr. Powell needs to stroll a line in between shoring up confidence in policy makers’ response to the crisis without sounding unduly optimistic, Nick Timiraos reports.

Ask WSJ: Sign up with three of The Wall Street Journal’s leading economics writers for a discussion on the Fed and its historic actions in the wake of the coronavirus pandemic. Begins Friday at 12 p.m. ET

The coronavirus crisis may overthrow a nearly four-decade long term for the Kansas City Fed’s yearly conference in Jackson Hole, Wyo The bank said Tuesday that it had been notified that the Jackson Lake Lodge conference center, with the Grand Teton mountains looming simply off in the range, would not open this year, Michael S. Derby reports.

Bad Company

Major U.S. makers said some closed plants may never ever resume and new item introductions could be postponed after the coronavirus pandemic slashed need for whatever from bikes to industrial paint. Caterpillar stated its first-quarter revenue fell by a 5th, and Harley-Davidson said retail sales of its bikes plunged around the globe during the quarter, Austen Hufford and Bob Tita report.

Even for companies with service from the coronavirus, the image is mixed 3M said it would furlough workers and idle some factory lines apart from its growing N95 mask service. United Parcel Service is logging higher income as homebound Americans store online, however its more rewarding company of delivering huge deliveries to workplaces and shops has dried up.

President Trump invoked the Defense Production Act to keep meat-production centers running. Meatpacking plants across the nation have actually ended up being locations for the coronavirus, cutting production of chicken, beef and pork, and sparking issues about the nation’s food supply, Andrew Restuccia and Jacob Bunge report.

U.S. customer confidence published its biggest regular monthly decrease on record in April. The Conference Board’s index revealed customers especially downbeat about present conditions. However they appear to see the nation beginning to emerge from the coronavirus pandemic relatively quickly– a measure of expectations for the next 6 months improved.

A comparable vibrant emerged in a current quarterly poll of CEOs: A procedure of present conditions struck a record low, but expectations enhanced.

The European Commission Wednesday stated its Economic Sentiment Sign— an aggregate step of company and customer confidence–” crashed” to 67.0 from 94.2, the largest drop in a single month because the series started in1985 Just once has actually sentiment been weaker, which remained in March 2009, when the scale of the financial damage caused by the worldwide monetary crisis was ending up being clear, Paul Hannon reports.

European governments are preparing to open the continent’s economy by presenting rules and standards that amount to a sweeping reconfiguration of everyday life, from subway seating to class size. Federal governments from Paris to Madrid are searching for ways to revive their economies without setting off a surge in infections. The reopening will be gradual, extending into the summertime, and extremely targeted to very first benefit regions with less infections. Overall, the rules suggest a period of European confinement will not end as soon as national lockdowns start to officially raise in May, Stacy Meichtry and Giovanni Legorano report.

Something Not About Coronavirus, Please

The share of Americans marrying has actually fallen to its lowest level on record, recommending that financial insecurity and altering standards are eroding the institution.

Something Else Not About Coronavirus

Melissa Dell, a Harvard University teacher who studies the function of governments and other organizations in forming long-lasting financial outcomes, is this year’s recipient of the most distinguished award for young economic experts. The American Economic Association awarded Ms. Dell the John Bates Clark Medal honoring financial experts under 40 who have actually made considerable contributions to the field. In its citation, the AEA said she had “given a new energy and instructions to the whole field of political economy and advancement.”

Research highlights: Effects of required labor in Peruvian silver mines from 1573 to 1812 are still visible today in lower family consumption and stunted development in kids. A U.S. military algorithm that identified battle targets in Vietnam helps reveal that, “Bombing increased [Viet Cong] military and political activity, deteriorated local government administration, and reduced noncommunist civic engagement.”

INDICATION UP FOR OUR CALENDAR

Genuine Time Economics has launched a downloadable calendar with concise sneak peeks projections and analysis of major U.S. data releases. To contribute to your calendar please click here

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