Pollack: Full recovery ahead

The Monday Morning Quarterback
A quick analysis of important economic data released over the last week

By Elliot D. Pollack & Co. | Rose Law Group Reporter

The U.S. economy is continuing to trend toward full economic recovery, driven in large part by vaccination efforts which have now surpassed 150 million in the United States. The U.S. added 850,000 jobs last month, far surpassing preliminary expectations of 700,000 jobs, and has now recovered nearly 70% of lost jobs. This still pales in comparison to the record number of job openings (9.3 million). As expected, with spending shifting to services, employment gains were concentrated in leisure and hospitality, accounting for 40% of all new jobs. Sky Harbor traffic is showing similar trends, up over 500% from last May and just over 10% below May 2019 levels. Growth is expected to continue with new employment gains, a red-hot real estate market, and pent-up demand for goods, services, and travel.

U.S. Snapshot:

  • U.S. employment closed the second quarter by adding 850,000 jobs in June. June’s total brought the quarterly total to 1.7 million and the year-to-date amount to nearly 3.3 million. Since the recovery started, the economy has added 15.6 million jobs, which is nearly 70% of all jobs lost.
  • June’s employment growth was above expectations of 700,000 jobs with the majority of the gains coming in Leisure & Hospitality, Government, and Trade, Transportation, & Utilities. The only job losses occurred in Construction and Financial Activities.
  • ISM’s Manufacturing PMI index remained above 60 for the fifth month in a row, signaling strong growth in the sector. The index declined from 61.2% to 60.6% and remained well above the figure seen last year.
  • Consumer confidence jumped to 127.3 and reached the highest level since February 2020 (132.6). Growing optimism for the job market offset concerns regarding inflation.
  • New orders saw an increase of 1.7%. May’s monthly increase was in line with expectations. Durable goods increased 2.3% in May after a 0.7% decline in April.

Arizona Snapshot:

  • Traffic at Sky Harbor continues to increase. May’s level was up a whopping 507.1% from a year ago and was only down 10.4% from May 2019. Year-to-date, total traffic has increased 21.3% from a year ago but is still down 33.2% from 2019.
  • If we needed more confirmation that prices in Greater Phoenix were continuing to increase this year, we got it with the latest Case-Shiller Index release. Prices in Greater Phoenix increased 22.3% compared to San Diego with 21.6% and Seattle with 20.2%. The 20-City Composite index saw a combined increase of 14.9%.
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