Economic Snapshot: Consumer confidence up from February

Consumer confidence has moved up and down from month to month since July 2015, but has hovered in the low to mid 90s.

Consumer confidence

Consumer confidence improved in March and now stands at 96.2. The Present Situation Index declined from 115.0 to 113.5, while the Expectations Index increased from 79.9 to 84.7.

Consumers who said business conditions were “good” decreased from 26.5 percent to 24.9 percent; however, those saying business conditions are “bad” also declined from 19.0 percent to 18.8 percent. Consumers who claimed jobs were “plentiful” increased from 22.8 percent to 25.4 percent, while those claiming jobs were “hard to get” also increased from 23.6 percent to 26.6 percent.

The percentage of consumers expecting business conditions to improve over the next six months increased from 14.5 percent to 15.0 percent and those expecting conditions to worsen decreased from 11.6 percent to 9.2 percent. Consumers anticipating more jobs in the months ahead increased from 12.2 percent to 12.9 percent and those anticipating fewer jobs decreased from 17.7 percent to 16.3 percent.

However, the outlook on income growth is not as favorable. The proportion of consumers expecting their incomes in increase declined from 17.7 percent to 17.2 percent and the proportion expecting a reduction in income edged up from 11.6 percent to 11.8 percent.

ADP employment report

Private sector employment increased by 200,000 jobs from February to March, largely unchanged from the 205,000 jobs added in February.

Small businesses contributed most heavily to the job growth in March, adding 86,000 jobs, up from February’s downwardly revised 68,000. Medium businesses were not behind with 75,000 jobs added, up from February’s 60,000. Large companies added 39,000 jobs, a sharp decline from the 77,000 jobs added last month.

Service-producing employment rose by 191,000 jobs in March, down from 204,000 in February. Professional/business services contributed 28,000 jobs, dropping from 51,000 in February. Trade/transportation/utilities grew by 42,000 jobs, a sharp increase from 24,000 last month. Financial activities added 14,000 jobs, in line with the average monthly increase for the sector over the past year.

Goods-producing employment rose by 9,000 jobs in March, up from a downwardly revised 2,000 in February. The construction industry added 17,000 jobs, which was down from 24,000 in the previous month. Manufacturing added 3,000 jobs after losing 9,000 in February.

GDP

Real gross domestic product increased at an annual rate of 1.4 percent in the fourth quarter of 2015, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased by 2.0 percent.

The “third” estimate is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 1.0 percent.

However, the general picture remains the same, with personal consumption expenditures (PCE) increasing more than previously estimated.