PRODUCTION MINUS LABOR INPUT:

[W]hat happens when we zoom out and look at the broader measure, Gross Output? We see a smaller contraction:

"Real gross output--principally a measure of an industry's sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs)--decreased 4.0 percent in the first quarter. " [...]

What we see is that 'private goods' barely contracted at all. That's likely because GO includes the steps in production beforehand. So if people stop buying things at the store, GDP plunges, but that doesn't mean businesses stop growing, weaving, building, filming, or cooking the things that eventually will get put on the shelves. The supply chain doesn't shut down unless business believes that there is a permanent or long-term shut-down on the consumer.

GO shows us that business is still in business. Slowing down to be sure, but not acting as though we're never going shopping again. That's the advantage of not focusing exclusively on GDP, with its bias towards consumption and against production. GO shows us that the true contraction was a little less serious than generally believed.

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