And consider these effects from the WSJ:
- U.S. auto production slowed in April. “For the first time in 10 months U.S. manufacturing output fell in April, on account of a fall in auto production as the natural disaster in Japan disrupted the supply of auto parts,” the global macro team at the World Bank reports in its daily digest of economic news. “The disruptions to the auto sector are expected to linger through the second quarter thus continuing to dampen the contribution of that sector to overall industrial production growth in the US through the second quarter.”
- Singapore’s non-oil domestic exports in April were down 1.8% compared with a year earlier, compared with a 9.9% increase in March. “Exports appear to be facing headwinds from the supply-chain disruptions associated with the calamities and, likely also, the impact of elevated oil prices on disposable incomes in advanced economies,“ said Leif Eskesen, India and Asean economist at HSBC. “Going ahead, we are likely to see more soft readings over the next few months for the same reasons, although the Japan-related supply disruptions are expected to be temporary and dissipate during the second half of 2011.”
- Of course, the effects are strongest closest to home: Japan reported Thursday its economy shrank in the first quarter at a seasonally adjusted annualized rate of 3.7%. Two consecutive quarters of economic contraction is the shorthand definition of a recession. “The further contraction in GDP in Q1 confirms that Japan is now in recession and we expect the decline in Q2 to be even bigger,” says Capital Economics. “The economy was weak before the Great East Japan Earthquake struck on 11th March and the full impact of that catastrophe has only just begun to be reflected in the GDP data.”
Expect these effects to continue through as least the end of the second quarter, and probably well into the third.