7/7: MetroIntelligence Economic Update by P. DUFFY

June service sector activity index jumps 11.7 points to 57.1

The NMI® registered 57.1 percent, 11.7 percentage points higher than the May reading of 45.4 percent. This reading represents growth in the non-manufacturing sector after a two-month period of contraction preceded by 122 straight months of expansion. This is the largest single-month percentage-point increase in the NMI® since its debut in 1997.



Employment Trends Index up 8.34 percent in June, but down 54.8 percent year-on-year

The Conference Board Employment Trends Index™ (ETI) increased in June, further stabilizing from sharp declines in recent months. The index now stands at 49.05, up from 45.27 (a downward revision) in May. However, the index is still down 54.8 percent from a year ago. Although the index increased for the second consecutive month,  the virus’s recent proliferation threatens those gains and puts the US labor market’s future in an even more precarious position. Consequently, the unemployment rate may plateau or even increase in the coming months.



CEO confidence index rebounds to 44 in 2Q 2020, but wait-and-see sentiment still prevails

The Conference Board Measure of CEO Confidence™, which declined to 34 in the first quarter of 2020, increased to a reading of 44 in the second quarter. (A reading of more than 50 points reflects more positive than negative responses.) Still, an encouraging seven-in-ten CEOs expect that both the economy and their own industry will fare better over the coming months. However, there are no indications yet that this renewed short-term optimism will translate into a pickup in investment.



Investor/Retirement Optimism Index plunged 134 points in 2Q 2020

The Wells Fargo/Gallup Investor and Retirement Optimism Index — an indicator of U.S. investors’ outlook for the investing climate — showed the largest quarterly drop in its history for the second quarter. The index plunged a record 134 points in May, to +4, the lowest it has been in nearly seven years. This comes after registering a 20-year high of +138 in the first quarter of 2020.