September

National Economy

• Real gross domestic product (GDP) expanded 1.1 percent in the second quarter of 2016, according to the second estimate of GDP from the Bureau of Economic Analysis. This was an increase from the 0.8 percent growth in the first quarter, but was below consensus expectations for the quarter.

• Personal consumption expenditures (PCE) were a strong contributor to the GDP increase, growing 4.4 percent in the second quarter for the strongest growth in the measure since the fourth quarter of 2014. The increase in GDP also reflected a positive contribution from exports.

• The positive contributors to GDP were partially offset by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment and government spending.

• Residential fixed investment declined 7.7 percent, according to the second estimate, for its first negative reading since the first quarter of 2014.

• According to the most recent inflation readings, the core consumer price index (CPI), which excludes food and energy, increased 2.3 percent from August 2015 to August 2016. The overall CPI continued to be more subdued, with a 12-month price increase of just 1.1 percent.

• The U.S. economy added 151,000 jobs, on net, in August for a 0.1 percent increase in employment. Since August 2015, employment in the U.S. grew 1.7 percent by adding just over 200,000 jobs per month. The unemployment rate in August remained at 4.9 percent for the third straight month while the labor force participation rate remained at 62.8 percent.

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics

Regional Economy

• According to our September surveys, business conditions improved for service sector firms in the Fifth District, as the overall revenues index increased to a value of 14; however, manufacturing activity remained soft as the composite diffusion index registered slightly less negative, at -8, in the month.

• Payroll employment in the Fifth District rose 0.1 percent in August as firms added 12,600 jobs on net. Employers in Virginia added the most jobs in August (13,100 jobs) while the District of Columbia reported the largest percentage growth of 0.8 percent by adding 5,900 jobs. Total employment increased in every District jurisdiction except North Carolina, where 14,100 jobs were lost in August.

• Since August 2015, employment in the Fifth District grew 1.8 percent, which slightly outpaced the national average of 1.7 percent. On a year-over-year basis, every jurisdiction in the District reported job growth ranging from 0.2 percent in West Virginia to 2.5 percent in South Carolina.

• The Fifth District unemployment rate was unchanged at 4.5 percent in August but rate changes varied by jurisdiction. Unemployment rates declined in North and South Carolina, were unchanged in Maryland and West Virginia, but rose slightly in D.C. and Virginia.

• Since July 2015, home prices in the Fifth District rose 3.1 percent, ranging from 1.2 percent in Maryland to 8.6 percent in West Virginia.

Sources:Snapshot, Regional Economy, Bureau of Labor Statistics, CoreLogic