2021 Midyear Outlook: Navigating through the recovery
Listen in as we discuss our outlook on the US recovery and the Federal Reserve’s new framework, including its impact on inflation, interest rates and growth.
March payrolls beat consensus estimates by 256,000, the largest one month increase since August. High-frequency data suggests gains in April and May could be greater than 1,000,000.
We have long hypothesized that by April we would see the beginning of a strong recovery in the lagging services sector. Improved COVID-19 immunity from prior infections and vaccinations the main driver of the bounce-back. The March jobs report provided considerable evidence that this view is correct. Employment in leisure & hospitality, state & local education, construction and transportation showed strong gains. The improving services sector and a global inventory rebuild, gives us increased confidence in our above-consensus U.S. GDP growth estimate of 7.1% for 2021.
Source: BLS, Bloomberg, Ivy Investments. Dates shown are May 2020 through March 2021. This chart is being provided as a general source of information for education purposes only, and is not intended as a recommendation to purchase, sell or hold any specific security or to engage in any investment strategy.