Week In Review 6-4-2021

Week in Review – Friday, June 4th 2021

1. Job growth continues

US private employers added 978,000 jobs during May, the biggest increase since May 2020. The consensus expectations were for private payrolls to increase by only 650,000 jobs, and so the results significantly exceeded expectations. An easing in the COVID-19 restrictions due to vaccinations has allowed an acceleration in jobs.

Source: Dept. of Labor

Data was also released for initial unemployment claims which came in at 385,000. This figure is the lowest since the escalation of the pandemic in March 2020 but still above the 200,000 – 250,000 range prior to COVID-19 that was associated with a healthy labor market.

Overcoming the obstacles to getting back to pre-COVID-19 employment levels continues to be a focus for the government and employers. Initiatives to raise pay and reduce funding for unemployment programs are expect-ed to sustain strong job growth for the coming months.

2. Economic activity expands at a record pace in may

Economic activity in the services sector grew in May for the 12th consecutive month as measured by the Institute for Supply Management (ISM) Index. The index reached an all-time high, registering 64% versus the previous record high of 63.7% in March. For the ISM Service Index, a reading over 50% indicates expansion.

Source: Institute for Supply Management

The survey noted that the rate of expansion is very strong, as businesses have re-opened and production capacity has increased. However, the report also acknowledged that despite the record reading, the rate of growth has been tempered somewhat by capacity constraints, material shortages, weather-related delays, challenges in logistics, and employment resources.

Source: Institute for Supply Management

While the pace of growth is a very positive indicator for the economy, the highest-scoring component of the ISM Services Index was prices paid for materials and services registering at 80.6%.

Given the inherent inflation being experienced by service businesses and the difficulty finding labor, the pressure on the Federal Reserve to moderate stimulus or at least begin a discussion in this direction is building.

Thinking Ahead

New data this week continues to support the strong recovery in the economy and employment. However, constraints are also present in part due to the rapidity of the growth putting upward pressure on near-term prices. Pallas Capital Advisors will continue to monitor economic, political, and corporate data for implications to markets.

Download PDF

The information contained herein is for informational purposes only, is not personalized investment advice and should not be construed as a recommendation to purchase or sell any particular security, sector or strategy to any individual person or entity. The decision to review or consider the purchase or sale of any security, sector or strategy mentioned should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional. Past performance should not be considered as an indicator of future results.

Investment Advice offered through Pallas Capital Advisors LLC, a registered investment advisor.

Braintree, MA

45 Braintree Hill Office Park Suite 201
Braintree, MA 02184
(781) 971-5052

Wakefield, MA

701 Edgewater Drive
Suite 140
Wakefield, MA 01880
(781) 587-3478

Portsmouth, NH

36 Maplewood Avenue
Portsmouth
NH 03801
(603) 292-3699

Park Ridge, NJ

1 Maynard Drive
Suite 2101
Park Ridge, NJ 07656
(551) 277-2686

Newport, RI

51 Long Wharf Mall
Newport, RI 02840
(401) 847-0505

Check the background of your financial professional on FINRA’s BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Pallas Capital ADVISORS is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Pallas Capital Advisors and its representatives are properly licensed or exempt from licensure. This website is solely for information purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Pallas Capital Advisors unless a client service agreement is in place.

Advisory services are only offered to clients or prospective clients where Pallas Capital Advisors and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Pallas Capital Advisors unless a client service agreement is in place.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information.