The record US economy is here: Morning Brief

Receive the Morning Brief sent directly to your inbox every Monday and Friday at 6:30 am ET. Subscribe

Tuesday, April 6, 2021

Employment growth skyrockets, service activity hits a record high and it is still only April.

For months, we wrote here in The Morning Brief about the increase in economic activity this year.

And the days of seeing this growth are just beginning.

On Monday, data from IHS Markit and the Institute for Supply Management on activity in the services sector opened the door to analysts’ expectations, as ISM’s activity index reached a record high. The IHS Markit reading was the best in seven years.

“The Services PMI recorded a historic high of 63.7%, 8.4 percentage points above the February reading of 55.3%,” said Anthony Nieves, chairman of the ISM services business research committee. “The previous high was in October 2018, when the Services PMI registered 60.9%. The March reading indicates the 10th consecutive month of growth in the service sector, which has grown in all the last 134 months, except two.” The only two months of contraction were March and April 2020.

Nieves added that the report reflected a “substantial increase in the growth rate in the service sector in March. Comments from respondents indicate that lifting restrictions related to the coronavirus pandemic (COVID-19) has released pent-up demand for many of its services. of the respective companies. Production capacity constraints, material shortages, climate and challenges in logistics and human resources continue to cause disruptions in the supply chain. ”

Chris Williamson, chief business economist at IHS Markit, said on Monday that the “recent increase in service sector growth shows no signs of abating, with another impressive performance in March closing a quarter in which PMI surveys indicate that the economy grew at an annualized rate of approximately 5%. ”

These reports also follow last Friday’s March jobs report, which also exceeded expectations, showing that 916,000 jobs were added to the economy last month, with the unemployment rate dropping to 6%. Including job growth revisions in January and February, about 1 million more Americans were employed at the end of last month than previously reported.

And these reports are at the forefront of what is expected to be just a hugely successful summer for growth in America. Last month, we noted that Wall Street was having trouble keeping up with the economy and the continued recovery of the stock market. And with three important economic data points reaching well above expectations in the past two business days and stocks hitting a record high earlier in the week, it appears that this trend continues.

The UBS economy team, for example, predicts GDP growth in the second and third quarters of 2020 by 10.7% and 8.4%, respectively. But the company expected Monday’s ISM service index to reach 60, almost 4 percentage points before the index entered.

“In January, our forecasts for payrolls of 1 million per month in the second quarter received a substantial setback,” the company said in a note published on Friday. “Now, it looks like we may have been cautious.”

And they are not alone.

Per Myles Udland, reporter and anchor for Yahoo Finance Live. Follow him on @MylesUdland

What to watch today

Economy

Earnings

Headlines

Credit Suisse warns that Archegos Capital explosion will cost US $ 4.7 billion [Yahoo Finance UK]

European market recovers with Boris confirms plans to reopen [Yahoo Finance UK]

Google’s Supreme Court victory over Oracle considered “fantastic” for small businesses [Yahoo Finance]

Oil prices rise amid strong economic data from the US and China [Yahoo Finance UK]

Yahoo Finance Highlights

Why growth stocks can rise from here

The US will lose 80,000 retail stores by 2026: UBS

Costco’s actions may surprise if the company raises membership fees in the fall of 2022

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, YouTube and reddit.

Find live stock market quotes and the latest business and finance news

For tutorials and information on investing and trading stocks, take a look at Cashay

Source