Our move: The NAM has been deeply involved in this issue and is communicating with federal policymakers to urge swift negotiations. For more information, please contact NAM Vice President of Infrastructure, Innovation and Human Resources Robyn Boerstling.
- The S&P Global Flash U.S. Manufacturing PMI declined from 59.2 in April to 57.5 in May, a three-month low but continuing to expand modestly despite numerous challenges. New orders, output and exports slowed in May, but respondents remained optimistic in their outlook.
- The two regional manufacturing surveys moved in opposite directions in May. The Kansas City Federal Reserve Bank reported solid expansions in activity, with hiring rising at a record pace but other data mixed. However, manufacturing activity contracted in the Richmond Fed survey in May for the first time since September. Inflation remained a significant challenge, as were other factors.
- Personal spending rose 0.9% in April, a solid pace despite slowing from the 1.4% gain in March, with 9.2% growth year-over-year. Personal income increased 0.4% in April, and manufacturing wages and salaries increased 0.6% for the month, or 10.3% year-over-year.
- With spending growth outpacing income, the personal saving rate fell from 5.0% to 4.4%, the lowest since September 2008. This suggests that, while consumer spending remains strong, Americans are dipping heavily into their savings to finance those purchases.
- The Index of Consumer Sentiment fell from 65.2 in April to 58.4 in May, according to preliminary data from the University of Michigan and Thomson Reuters.
- In revised data, the U.S. economy shrank 1.5% at the annual rate in the first quarter, contracting for the first time since the second quarter of 2020. Overall, real GDP growth contracted on reduced government spending, inventories, net exports and nondurable goods spending, offsetting stronger data for durable goods purchases, service-sector consumer spending and nonresidential fixed investment.
Overall, the current forecast is for 2.7% growth in real GDP in 2022, with the economy rebounding in the second quarter. With that said, the growth outlook has been dampened by uncertainties surrounding the situation in Ukraine, the shutdowns in China related to COVID-19 and attempts to slow pricing pressures. Indeed, there are notable downside risks to the forecast, and consumers and businesses openly worry about a slowdown, especially in 2023.