The Fog Surrounding the Coronavirus Economy

Just how serious will the economic impact of the coronavirus be? Amid vast uncertainty, some very large numbers are flying around, and there’s a lot of confusion over what they mean. Peering through this fog, it’s worth noting: Authoritative official forecasters are far more pessimistic in the short term than most private-sector analysts.

My colleague Justin Fox recently drew attention to one persistent source of muddle about the numbers — namely, the U.S. habit of annualizing quarterly rates of growth. When Goldman Sachs, for instance, recently said output would fall by 34% in the second quarter, it meant that it would actually fall by around 10%. (The bigger number is what the annual decline would be if that quarterly rate persisted for a whole year.)