The data to focus on instead of GDP to understand where the economy is going

This week the US got a glimpse of how severely the coronavirus pandemic has hurt its economy, with the latest gross domestic product numbers showing a 9.5% drop in the second quarter from the first.

To understand the effects of Covid-19 going forward, however, economists within and outside the US government are parsing very different sets of data.

In addition to the traditional indicators the US Federal Reserve uses to track the economy, it has been looking more closely at real-time data, from credit and debit card transactions to foot traffic at different retailers. These weekly and daily data sets—known as high-frequency data—show that after recovering somewhat from the big slump earlier this year, economic activity has been flagging since the number of Covid-19 cases spiked in June.

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