The second estimate of GDP for 2018 Q1 was revised downward by -0.1% to 2.2% from the advance estimate due to downward revisions to private inventory investment (-0.3%), residential fixed investment (-0.08%) and exports (-0.6%), which were partly offset by upward revisions to nonresidential fixed investment (+0.37%). The first estimate for Gross Domestic Income (GDI) growth was +2.8% compared to an upwardly revised +1.0% (+0.1%) for Q4, and the price index for gross domestic purchases was +2.7% Y/Y. Corporate profits from current production, adjusted for inventory and capital consumption, were down -$12.4 billion (vs. -$1.1 billion for Q4).

A +0.3% increase in employee compensation pushed personal income up +0.3% in April, while March’s increase was revised downward by -0.1% to +0.2%. The personal savings rate dropped to +2.8% (-0.2%), helping to finance a +0.6% increase in personal consumption expenditures (PCE), which included a +0.9 increase in expenditures for nondurable goods and a +0.5% increase in service spending. The PCE price index increased +0.2% (+2.0% Y/Y), and core PCE inflation, excluding food and energy, was up +0.2% (+1.8% Y/Y). March's yearly core PCE inflation was revised downward -0.1% to +1.8%, leaving yearly core PCE inflation unchanged in April, and below the Federal Reserve's target 2.0% rate.

Employment increased by 223,000 in May, pushing the unemployment rate down to 3.8%, while the workforce participation rate ticked down from 62.8% to 62.7%. Employment increased in retail (+31,000 M/M), health care (+29,000), construction (+25.000), professional services (+23,000), transportation and warehousing (+19,000), and manufacturing (+18,000), with average hourly earnings up +0.3% (2.7% Y/Y), and the workweek remaining steady at 34.5 hours. The more comprehensive U-6 unemployment rate, which also includes part time workers seeking full time employment, dropped -0.2% to 7.6%.