Economic Snapshot: Consumer confidence at 11-month high

Consumer confidence, which had decreased slightly in July, increased in August by almost five points – from 96.7 to 101.1. This is the index’s highest reading since September 2015.

The Present Situation Index jumped from 118.8 to 123.0 and the Expectations Index rose from 82.0 to 86.4.

Consumers stating business conditions are “good” increased from 27.3 percent to 30.0 percent, while those saying business conditions are “bad” remained virtually unchanged at 18.4 percent. Those claiming jobs were “plentiful” increased from 23.0 percent to 26.0 percent; however, those claiming jobs are “hard to get” also rose, from 22.1 percent to 23.4 percent.

The percentage of consumers expecting business conditions to improve over the next six months increased from 15.7 percent to 17.3 percent and those expecting business conditions to worsen decreased from 12.4 percent to 11.1 percent.

The proportion of consumers expecting more jobs in the months ahead increased from 13.5 percent to 14.2 percent, while those anticipating fewer jobs remained virtually unchanged and 17.5 percent. The percentage of consumers expecting their incomes to increase rose from 17.1 percent to 18.8 percent and the proportion expecting a decline decreased marginally from 11.0 percent to 10.7 percent.

ADP Employment Report

Private sector employment increased by 177,000 jobs from July to August, down from 194,000 jobs in the previous month.

Large businesses contributed most heavily to employment this month, adding 70,000 jobs in August, which is up from July’s 56,000. Small businesses added 63,000 jobs in August, down from 68,000 last month. Medium-sized businesses added 44,000 jobs in August, down from last month’s 71,000.

Service-producing employment rose by 183,000 jobs in August, fewer than July’s 199,000 jobs. Professional/business services contributed 53,000 jobs, down from 70,000 last month. Trade/transportation/utilities increased by 26,000 jobs, down from 31,000 in July. Financial activities added 15,000 jobs, up from July’s 13,000.

Goods-producing employment was down by 6,000 jobs in August, following July’s losses of 5,000. The construction industry lost 2,000 jobs, following last month’s losses of 5,000. Manufacturing jobs were flat in August after gaining 5,000 the previous month.

GDP

Real gross domestic product increased at an annual rate of 1.1 percent in the second quarter of 2016, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 percent.

In the “advance” estimate last month, the increase in real GDP was 1.2 percent. With this second estimate, the general picture of economic growth remains the same as revisions to the components of GDP are small.