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Richmond Fed at a Glance

June 2018

National & Regional Economy

graphs on a computer screen

National Economy

  • Real gross domestic product (GDP) increased at an annual rate of 2.2 percent in the first quarter of 2018, according to the second estimate of GDP released by the Bureau of Economic Analysis. This was a slight downward revision from the advance estimate of 2.3 percent.
  • Real GDP growth in the first quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, net exports, private inventory investment and government spending that were partially offset by a negative contribution from residential fixed investment.
  • The second estimate of real PCE growth was revised to 1.0 percent in the first quarter, down from 1.1 percent in the advance estimate.
  • Real private nonresidential investment expanded 9.2 percent in the first quarter, which reflected expansion in structures, equipment and intellectual property investment. Investment in structures grew at an annual rate of 14.2 percent in the quarter, which was above the 2017 annual growth of 5.6 percent.
  • Meanwhile, real residential investment contracted at a 2.0 percent annual rate in the first quarter of 2018 after growing 12.8 percent in the fourth quarter of 2017.
  • Inflation, as measured by the consumer price index (CPI), had a 12-month change of 2.8 percent in May, up from a reading of 2.5 percent in February. This was the highest the rate has been since February 2012. Core CPI, which excludes food and energy, increased 2.2 percent year-over-year.
  • Firms in the U.S. added 223,000 jobs in May, on net, after a 159,000 job gain in April. Since May 2017, employment expanded 1.6 percent. Meanwhile, the unemployment rate declined 0.1 percentage point to 3.8 percent in May and the labor force participation rate fell slightly to 62.7 percent, down from 62.8 percent in April.

Sources: Bureau of Economic Analysis, Bureau of Labor Statistics

Regional Economy

  • Our most recent surveys reflected stronger business conditions in the Fifth District in May, in both the service and manufacturing sectors. The manufacturing composite diffusion index rebounded from negative 3 in April to 16 in May. In the service sector, the overall revenues index rose from 2 in April to 11 in May. Survey results suggested strengthening labor conditions in both sectors, as the majority of surveyed firms reported an increase in employment and wages.
  • Firms in the Fifth District added a net 47,900 jobs (0.3 percent) in May, as jobs were added in every jurisdiction. The most jobs were added in North Carolina (21,600 jobs), but West Virginia saw the highest growth rate at 1.4 percent (10,600 jobs).
  • Since May 2017, employment grew 1.6 percent (229,500 jobs) in the Fifth District, coming in even with national employment growth over the same period. Employment rose in every jurisdiction on a year-over-year basis, with the strongest growth in North Carolina and West Virginia, which both grew 2.3 percent, surpassing the national growth rate.
  • The unemployment rate in the Fifth District dropped to 4.0 percent in May, remaining above the national rate of 3.8 percent in the same month. Unemployment rates dropped or held steady among all District jurisdictions in May, ranging from 3.2 percent in Virginia to 5.6 percent in the District of Columbia.
  • Since April 2017, home prices in the Fifth District grew 3.6 percent, trailing the national increase of 7.0 percent. Home prices increased over the year in every jurisdiction. South Carolina saw the fastest year-over-year home price growth of 5.3 percent, while the slowest was in the District of Columbia (2.0 percent).

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

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Jim Strader (804) 697-8956 (804) 332-0207 (mobile)