Economic Data to Watch for Signs of Coronavirus Impact - The Wall Street Journal

Shoppers waited to pick up toilet paper that had just arrived at a Costco store... — Shoppers waited to pick up toilet paper that had just arrived at a Costco store in Tacoma, Wash., on March 7, when coronavirus fears were mounting.
Photo: Ted S. Warren/Associated Press

Sarah Chaney

The Wall Street Journal

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sarah.chaney@wsj.com

March 11, 2020 1:04 pm ET

The impact of the novel coronavirus is rippling through U.S. and global economies, but it could take a few months to fully see the fallout in data that tracks economic performance around the world.

So far, the virus has had a muted effect on data, but most private-sector and government economic surveys were conducted before concerns of the infection’s potential economic impact rose in late February. On Wednesday, for instance, the Labor Department’s consumer-price index largely showed price changes for goods and services before the coronavirus spread in the U.S.

In the coming months, everything from employment to gross domestic product and inflation will reflect the coronavirus’s effect on business and consumer activity. Some of the most timely measures to watch in the near-term are U.S. jobless claims, consumer-confidence surveys and purchasing-managers surveys, because they are released with short lag times after the data is compiled.

Of course, the length and depth of the virus will determine how much it throws the U.S. economy off course. Economists from IHS Markit expect the virus will hurt the U.S. economy but not drive it into recession. The data firm projected 1.8% annual growth in 2020, down from a previous forecast of 2.1%.

Here is what to watch in the weeks ahead:

Jobless Claims

Early evidence of the coronavirus’s impact on the U.S. labor market could come Thursday with the weekly release of jobless claims. This proxy for company layoffs remained historically low in late February amid escalating virus concerns on the economies.

Keep an eye on whether claims rise significantly in coming weeks or whether they hover at historic lows. Continually low claims would offer a sign employers are trying to hold on to workers in a tight labor market given the virus could soon pass. It doesn’t, however, mean companies will continue to hire at the robust pace seen in recent months.

Consumer Sentiment

Keep a close eye on the University of Michigan’s consumer-sentiment survey released this Friday. The survey, published twice a month, will offer a gauge of Americans’ economic perceptions during early March when coronavirus fears were mounting.

The most recent consumer-sentiment release covered a period before coronavirus concerns triggered a stock-market selloff in late February. One-fifth of consumers canvassed at the end of February cited concerns about the threat of coronavirus and its stock-market impact. This number could rise in March and ultimately lead to a deterioration in spending.

Business Surveys

Purchasing managers’ data offer a barometer on business activity based on surveys of senior executives and supply-chain managers. These figures are released monthly for both manufacturing and services sectors by two different firms: IHS Markit and the Institute for Supply Management.

IHS Markit also publishes these data for countries around the globe. In February, IHS Markit’s survey indicated U.S. business activity fell swiftly as companies pulled back on fears that China’s coronavirus outbreak would slow global growth. Other surveys of purchasing managers at businesses showed the epidemic had further weakened growth in Japan, and hit export orders in Germany.

Private-Sector Data

The rapid spread of the coronavirus emphasizes the need for real-time data, even if the numbers only illustrate a small slice of consumer behavior. Private-sector data sources can help provide timely glimpses into Americans’ and businesses’ shifting habits in light of the viral outbreak. Job-search sites are tracking worker trends. At job-search site Indeed.com, for example, more workers are looking for the ability to work from home. And at Glassdoor, more employers are looking for workers to respond to the epidemic, ranging from nurses and epidemiologists to public health communications and consulting. Other sources track box-office receipts, food deliveries and air travel.