By Quoctrung Bui and Justin Wolfers
New data on electricity use suggest that U.S. economic activity probably declined more over the past three weeks than it did during the entire year and a half of the Great Recession. It may already be the deepest downturn since the Great Depression; it is certainly the fastest.
These numbers are important because our official statistics can’t keep pace with the abrupt economic changes the coronavirus shutdown has caused. All those closed stores, silenced factories and darkened office buildings are yet to be counted in the government’s official economic numbers, which take months to collect, process and report.
But evidence of the sharp economic shift shows up in a large and rapid decline in electricity usage over recent weeks.
The numbers come from a new electricity-based measure that Steve Cicala, an economics professor at the University of Chicago, has devised to track the state of the economy and how it changes from day to day. The idea of tracking electricity usage, he says, follows from the observation that most economic activity requires electricity.
Mr. Cicala’s results conform with a similar analysis from the U.S. Energy Information Administration and from reports by regional electricity providers. “In terms of this scale of event, I don’t think we’ve had in recent history anything like this hit the grid,” said April Lee, an analyst at the E.I.A.
Mr. Cicala said his indicator was useful in times of rapid economic change, adding, “While this isn’t a perfect measure, it certainly helps with filling in the gap so that we can get the most complete picture.”
The accompanying charts show large declines in electricity use across high-density cities, rural areas and industrial centers.