The coronavirus pandemic has slammed into the economy so hard the nation's GDP has fallen by 4.8 percent, bringing the longest economic expansion on record to an abrupt halt.
Gross domestic product, which measures the output of goods and services, sank by 4.8 percent in the first quarter on an annualized basis, according to an initial estimate from the Department of Commerce released Wednesday morning.
It's the steepest decline since the Great Recession, which ended in 2009. Economic growth was tracking at or above 2 percent until mid-March.
With most of the nation stuck at home, large swaths of the economy have shuttered, throwing 26 million people out of work. Consumer spending, which drives around two-thirds of economic growth, has plummeted.
While Wall Street had been steeling itself for the data, the worst is yet to come. First quarter data captured economic activity up to the end of March, but the second quarter will likely include three straight months of decline.
"You're looking at something like minus 20 percent to minus 30 percent in the second quarter," White House economic adviser Kevin Hassett told CNBC on Monday, noting that the coronavirus is "the biggest shock since the Great Depression. It’s a very grave shock and it’s something we need to take seriously.”
The Congressional Budget Office estimated second-quarter GDP would be down by as much as 40 percent, for the worst quarter since 1947.
Economists say the U.S. likely entered recession — generally defined as two consecutive quarters of decline in GDP — in the second half of March, when lockdowns began.
"You’re going to see the economy really bounce back in July, August, September," Treasury Secretary Steven Mnuchin told Fox News earlier this week. "You’re seeing trillions of dollars that’s making its way into the economy and I think this is going to have a significant impact," he said of the government's $2 trillion dollar emergency stimulus package meant to buttress the economy.
Attention now turns to the Federal Reserve, which concludes its two-day policymaking meeting on Wednesday afternoon. Fed Chairman Jerome Powell is expected to reiterate the central bank's steps to shore up the economy, and relay his outlook for the next few months.
In the past six weeks, the central bank has dropped interest rates to almost zero, expanded bond-buying programs, changed reserve requirements, and offered special financing to small businesses.