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Economic Commentary

We break down timely topics, centered on the major economic events around the world and their impacts to financial markets, in order to help you simplify client conversations around important investing decisions.

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Economic Commentary

April Economic Review: The boom is beginning

Activity surged in March as government-mandated restrictions continued to be loosened or eliminated, and the much of the country (Texas in particular) recovered from February winter storms and cold which left many without power for an extended period. Nonfarm payrolls had their largest increase since August, the Institute for Supply Management (ISM) services index had its highest reading ever, and consumer mobility data showed a strong rebound from February. 

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Economic Commentary

The service sector rebound takes off

Many service sector industries have taken the brunt of the pandemic’s economic impacts as government restrictions on in-person activity in response to COVID have disrupted the recovery for those businesses. The snowy and cold February weather added a further delay this year with many consumers staying indoors rather than visiting stores or restaurants. More seasonable weather and further easing of government mandates, as vaccinations increased and COVID infections fell, jumpstarted growth in March as the ISM services index soared to its highest reading ever (data back to 1997) — indicating strong sector expansion.  

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Economic Commentary

March job gains were hot, hot, hot

Nonfarm payrolls surged by 916,000 for March, far surpassing expectations and the strongest increase since last August. Job gains were widespread but there was a clear boost from reduced government-imposed COVID restrictions (another 280,000 spike in leisure and hospitality jobs) and the return of in-person schooling (total education jobs up 190,000). A rebound from the frigid and frozen February weather also led to a jump in construction employment as builders ramp up for expected strong spring and summer sales. Including upward revisions to previous months, the economy added a strong 1.62 million jobs over the first quarter. 

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Economic Commentary

Severe winter weather chills the housing market

Much worse than usual winter weather over the second half of February sharply cut into housing activity (sales and starts) for the month. Existing home sales dropped by 6.6 percent to an annualized pace of 6.22 million units — the lowest level since last July. New home sales fell by even more, plunging by 18.3 percent as far fewer contracts for new construction were signed. Sales were down across all the major regions, but the biggest losses were in the Midwest and South where winter storms were prevalent. Even with this outsized decline, the annualized pace of 775,000 for new sales was 8.2 percent higher than a year ago. 

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Economic Commentary

March Monthly Dashboard: Signs of post-pandemic economic acceleration

Worse than usual winter weather hit housing and retail sales in February, but these are likely to be only short-term bumps in the road. Manufacturing activity remains solid and significantly increased vaccinations are allowing more governments to ease restrictions. With more seasonable weather, consumers should return to more normal levels of activity. Stronger job and income gains (with the added boost from a third round of stimulus checks) should lead to a spending surge starting in March, boosting the recovery to a much faster pace over the rest of the year and into 2022.  

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Economic Commentary

Substantial weather drag for February activity

Retailers saw a hangover for February after January’s stimulus-induced spending surge as cold and snowy winter weather cut into consumer behavior. Total retail sales were much weaker than expected, falling by 3.0 percent — the largest decline since the 2020 COVID shutdowns. Some of this was due to more sales being pulled into January, which saw a sharp upward revision from a monthly gain of 5.3 percent to 7.6 percent. Still, spending decreased across nearly all categories as fewer people went out to auto showrooms and stores. But even factoring in February’s decline, retail sales were up by a robust 6.3 percent relative to February 2020 when COVID impacts were just starting to hit the U.S. economy.  

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