Economic Snapshot: Consumer confidence down for second consecutive month

Consumer confidence, which has been increasing and decreasing month to month, dropped for the second consecutive month in May.

Consumer confidence

Consumer confidence declined from 94.7 to 92.6 in May, following a decrease in April. The Present Situation Index decreased from 117.1 to 112.9 and the Expectations Index declined from 79.7 to 79.0 in May.

The percentage of consumers stating business conditions are “good” improved from 24.2 percent to 25.9 percent. However, those saying business conditions are “bad” also increased from 18.2 percent to 21.6 percent. The proportion of consumers claiming jobs are “plentiful” was essentially unchanged at 24.3 percent. Those claiming jobs are “hard to get” increased from 22.8 percent to 24.4 percent.

Consumers expecting business conditions to improve over the next six months increased from 13.8 percent to 15.1 percent, but those expecting conditions to worsen also rose from 10.8 percent to 11.6 percent.

The proportion of consumers anticipating more jobs in the months ahead was essentially unchanged at 12.8 percent and those anticipating fewer jobs increased from 16.7 percent to 18.1 percent. The proportion of consumers expecting their incomes to increase improved from 15.8 percent to 16.2 percent, while the proportion expecting a reduction remained steady at 12.4 percent.

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ADP employment report

Private sector employment increased by 173,000 jobs in May, up from 166,000 jobs in April.

Small businesses contributed 76,000 jobs in May, down from an upwardly revised 101,000 in April. Medium-sized businesses added 63,000 jobs, up from last month’s 39,000. Employment at large companies increased by 34,000, up from 25,000 in April.

Service-producing employment rose by 175,000 jobs in May, a slight increase over April’s upwardly revised 173,000. Professional/business services contributed 43,000 jobs, up from last month’s 38,000. Trade/transportation/utilities grew by 28,000, up from 24,000 in April. Financial activities added 13,000 jobs.

Goods-producing employment dropped by 1,000 jobs in May after losing 7,000 in April. The construction industry added 13,000 jobs, on pace with the previous month. Meanwhile, manufacturing lost 3,000 jobs after losing 10,000 in April.

Gross domestic product

Real gross domestic product increased at an annual rate of 0.8 percent in the first quarter of 2016, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.4 percent.

The estimate is based on more complete source data that were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 0.5 percent. With the second estimate for the first quarter, the decrease in private inventory investment was smaller than previously estimated.

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