Yelp Says User Data Signals the U.S. Economy Cooled in Second Quarter
Yelp’s consumer and business activity data signal that U.S. economic momentum cooled in the second quarter.
(Bloomberg) -- Yelp Inc.’s consumer and business activity data signal that U.S. economic momentum cooled in the second quarter, a sign of weakness before a gross domestic product report due Friday that’s forecast to show a deceleration in the world’s largest economy.
The measure, compiled by the online user review company, mainly tracks business survival and consumer interest. It reversed in the three months ending June after after a modest recovery in the prior quarter, according to a report Thursday from Yelp’s Data Science Editor Carl Bialik.
“The Main Street local economy may be showing warning signs,” Bialik said in the report. The Yelp Economic Average running below 2017 levels shows “a cooling brick-and-mortar economy across the U.S. that’s signaling a potential slowdown in consumer demand and business growth.”
Economists surveyed by Bloomberg project 1.8% growth in the last quarter after a 3.1% pace in the first three months of the year.
Major categories showing declines included professional services and home services, while restaurants and automotive businesses saw improvement. Cleanliness, however, proved resilient, with gains across car washes, carpet cleaning, laundry services and home cleaning.
Beyond the downbeat national reading, the study also noted that five of the 50 biggest metropolitan regions had strong combinations of business growth and consumer demand in the second quarter. They were: Honolulu; Milwaukee; Louisville, Kentucky; Memphis, Tennessee; and Portland, Maine.
Yelp said the robustness was driven by real-estate related business such as agents, lawyers, and services -- signaling a development boom “aided by permissive local laws.”
To contact the reporter on this story: Jeff Kearns in Washington at jkearns3@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Margaret Collins, Alister Bull
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