AllMarket Outlook
logoArgusJune 04, 2021

Daily Spotlight: May Payrolls Pick Up Pace

Market Outlook
Bullish - Short term
Summary

The U.S. economy added 559,000 jobs in May, up from April's weak growth of 266,000, and the unemployment rate ticked lower to 5.8%. Revisions to previous months' jobs totals raised the count by 27,000. The re-opening trend was noticeable, as jobs gains were led by sectors such as leisure and hospitality (+292k) and local government education (53k). Industries including healthcare, manufacturing and transportation also added jobs. The labor market continues to reflect the impact of the pandemic, as the shape and character of the workforce is changing as the economy recovers. The current number of jobs is approximately 3.6 million lower than the pre-COVID February 2020 level. The labor force participation rate remains a low 61.6%, compared to the historical average of 65%. Last month, 17% of employed persons teleworked because of the pandemic. On Thursday, the Labor Department reported that 385,000 people filed initial unemployment claims, down from 500,000 a month ago. Though trending in the right direction, these data points indicate that the employment environment is still under stress. We expect the unemployment rate will remain above 5.0% into 2022 and that the Federal Reserve will keep interest rates low.

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