Economic Snapshot: Huge gains in consumer confidence, private sector employment

Both consumer confidence and private sector employment saw large increases this month. However, the manufacturing industry continues to be a weak point for private sector employment.

Consumer confidence

Consumer confidence, which had declined in October, jumped in November from 100.8 to 107.1.

The Present Situation Index increased from 123.1 to 130.3 and the Expectations Index rose fro, 86.0 to 91.7.

The percentage of consumers saying business conditions are “good” improved from 26.5 percent to 29.2 percent and those saying business conditions are “bad” fell from 17.3 percent to 14.8 percent. The percentage of consumers stating jobs are “plentiful” increased from 25.3 percent to 26.9 percent and those claiming jobs are “hard to get” was unchanged at 21.7 percent.

The percentage of consumers expecting business conditions to improve over the next six months fell from 16.4 percent to 15.3 percent; however, those expecting business conditions to worsen also decreased from 11.8 percent to 10.0 percent.

The proportion expecting more jobs in the months ahead was essentially unchanged at 14.5 percent, but those anticipating fewer jobs fell from 16.6 percent to 13.8 percent. The percentage of consumers expecting their incomes to increase was little changed from last month at 17.5 percent, while the proportion expecting a drop in income fell moderately from 10.2 percent to 9.0 percent.

ADP employment

Private sector employment increased by 216,000 jobs from October to November, a huge increase from the 119,000 jobs added last month.

Large and medium businesses contributed most heavily to the increase, adding 90,000 and 89,000 jobs, respectively. Small businesses added 37,000 jobs in November.

Service-producing employment added 228,000 jobs in November. Trade/transportation/utilities added 69,000 jobs and professional/business services added 68,000 jobs. Financial activities added 12,000 jobs.

In good-producing employment, there were 11,000 jobs lost in November. The construction industry added 2,000 jobs in November, while the manufacturing industry lost 10,000 jobs.

GDP

Real gross domestic product increased at an annual rate of 3.2 percent in the third quarter of 2016, according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased by 1.4 percent.

The “second” estimate is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.9 percent. With the second estimate for the third quarter, the general picture of economic growth remains the same; the increase in personal consumption expenditures was larger than previously estimated.