Chart of the Week – Perfect Timing
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.