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The numbers: The New York Fed’s Empire State business conditions index plunged a record 34.4 points to -21.5 in March, the regional Fed bank said Monday. Economists had expected a reading of 4.8, according to a survey by Econoday. This is the lowest level since the financial crisis in 2009.
What happened: The new-orders index fell 31.4 points to -9.3 in March. Shipments fell 20.6 points to -1.7. Labor-market indicators weakened. The average workweek fell to -10.6 in March from -1. The number of employees fell to -1.5 from 6.6. Optimism about the six-month outlook dropped to 1.2 from 22.9.
Big picture: This is one of the first readings of the coronavirus outbreak’s impact on the economy and the results are not pretty. The worst seems yet to come. Fed Chairman Jerome Powell said Sunday that he expects negative GDP growth in the second quarter.
What are they saying? “The impact of the coronavirus was still in its early stages at the time of this survey. Nonetheless, the early indications suggest that the impact was substantial,” said T.J. Connelly, head of research at Contingent Macro.
Market reaction: A major rate cut by the Federal Reserve has failed to stemmed pessimism in financial markets. Stock market futures remained limit down ahead of Monday’s open. On Friday, the Dow Jones Industrial Average DJIA, +9.36% soared 1,985 points.
