Real-Time Real Economic Activity: Entering and Exiting the Pandemic Recession of 2020

Abstract: Entering and exiting the Pandemic Recession, I study the high-frequency real-activity signals provided by a leading nowcast, the ADS Index of Business Conditions produced and released in real time by the Federal Reserve Bank of Philadelphia. I track the evolution of real-time vintage beliefs and compare them to a later-vintage chronology. Real-time ADS plunges and then swings as its underlying economic indicators swing, but the ADS paths quickly converge to indicate a return to brisk positive growth by mid-May. I show, moreover, that the daily real activity path was highly correlated with the daily COVID-19 cases. Finally, I provide a comparative assessment of the real-time ADS signals provided when exiting the Great Recession.