Foodservice Equipment Reports

Macroeconomic Trends: U.S. GDP Growth Slows, Consumer Confidence Steady, Gas Prices Down

As has been clear from much first-quarter foodservice data, the very mild winter and other factors have boosted consumer spending. This was mentioned as the U.S. Commerce Department released its “advance” estimate of growth of the economy on April 27.

The top line number: real gross domestic product rose 2.2% in the first three months of the year, compared with a 3% gain in the fourth quarter 2011. But consumer spending was up 2.9%, compared with a 2.1% gain in the first quarter last year. The GDP slowdown was attributed to slower inventory growth and a drop in business investment for the first time since 4Q/’09.

Meanwhile, measures of consumer confidence from both Thomson Reuters/University of Michigan and The Conference Board were essentially flat in the final April readings, compared to March. The U.M. Consumer Sentiment Index rose a tick and The Conference Board’s Consumer Confidence Index fell a tick. But the U.M. Sentiment Index stands 9.5% higher than a year ago, while the U.M. Expectations Index is 17.4% higher than April ’11.

Consumers in both surveys noted that jobs growth had slowed again. “The main challenge to building a lasting economic recovery is renewed job and income growth as well as reducing uncertainty about future federal tax and spending policies,” said Richard Curtin, the Surveys of Consumers’ chief economist.

One final bit of good news for foodservice operators and those that supply them: The price of gasoline continued to fall last week, prompting some analysts to suggest that prices have peaked for the year. According to the AAA’s “Daily Fuel Gauge Report,” the national average price of a gallon of regular gas was $3.816 April 30, a drop of almost 11 cents in the past month and, perhaps equally significant 11.5 cents less than at this time a year ago. Diesel fuel prices are also lower, though by not quite as much.

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