In first three months of 2020, crisis takes its toll on economy

Those looking at this morning's GDP report and thinking, "Well, -4.8% isn't that bad" are mistaken.
Twenty Dollar Bills Are Printed At The Bureau of Engraving and Printing
WASHINGTON, DC - JULY 22: Treasury Secretary's Timothy Geithner's signature can be seen on a new twenty dollar bill, at the Bureau of Engraving and Printing on July 22, 2011 in Washington, DC. The printing facility of Bureau of Engraving and Printing on 14th Street in Washington was until 1991 the only facility printing Federal Reserve notes until a western facility was opened in Fort Worth, Texas.Mark Wilson / Getty Images

Many projections headed into this morning pointed to economic growth shrinking in the first quarter by 3.5%. The official data from the Commerce Department proved to be quite a bit worse.

Gross domestic product fell 4.8% in the first quarter, according to government numbers released Wednesday that provide the first detailed glimpse into the deep damage the coronavirus wreaked on the U.S. economy.

To put this in context, -4.8% in the first three months of this year represented the worst quarter since the final three months of 2008 -- the most severe period of the Great Recession -- when we saw -8.4%.

But those looking at this morning's GDP report and thinking, "Well, -4.8% isn't that bad" are mistaken. The figure, which will be revised in the coming months, includes a measurement of economic activity from January through March -- which is important, because the U.S. economy was quite healthy at the start of the year.

The effects of the coronavirus crisis weren't felt nationally, in earnest, until March, which reinforces the fact that this report is an incomplete picture. What's more, there is no doubt among anyone that the report for the second quarter -- covering April through June -- will be spectacularly worse.

As for the image above, the chart shows GDP numbers by quarter since the Great Recession began. The red columns show the economy under the Bush and Trump administrations; the blue columns show the economy under the Obama administration.