Early hopes for a rapid rebound have faded with most analysts assuming a jump in activity once the virus passes will be followed by a slower resumption of growth. So far, many data points signal a deepening contraction, while others have shown slight improvement, according to a Bloomberg Economics tracker.

Consumers Wary
Despite massive government aid packages and near-zero interest rates, businesses big and small risk going bankrupt, while consumers may remain wary of hitting shops and restaurants amid health concerns, higher debt burdens and job insecurity.

Another big question is how the recession affects the re-election chances of President Donald Trump, who lately has been pushing for removal of the constraints after losing the ability to run on a strong economy.

At the Federal Reserve, which slashed rates and rolled out a slew of emergency and unprecedented lending programs, Chairman Jerome Powell and colleagues are trying to limit the virus’s damage to jobs and business while setting the conditions for recovery.

They conclude a two-day meeting later Wednesday, with a statement expected at 2 p.m. in Washington and a press conference by Powell at 2:30 p.m.

While two quarters of contraction is considered by most to constitute a recession, the official call in the U.S. is made by the Business Cycle Dating Committee, a panel of economists at the National Bureau of Economic Research. They look at a wide range of indicators including consumer spending, employment and GDP.

The analysis can take a while. In the last recession, which became the longest since World War II, the committee didn’t make the determination for nearly a year after the downturn started.

In any case, the GDP figures underscore what’s already clear from government data showing 26 million Americans filing for unemployment, along with plunges in retail sales and factory production.

The contraction in first-quarter GDP -- the first decline since a 1.1% drop in 2014 -- compared with the median projection for a 4% drop in a Bloomberg survey of economists. In January, analysts were forecasting growth of 1.6%.

Spending Habits
Consumer spending, which had already begun to cool in the second half of 2019, fell at a 7.6% rate. Changing consumption habits were evident in the report, as a record increase in off-premises food and beverage spending was more than offset by the largest slump in purchases of durable goods such as autos in more than 11 years.