- Nonfarm payrolls grew by 2.5 million in May, while the unemployment rate fell to 13.3%
- The ISM manufacturing index registered 43.1 in May, improving from last month but still signaling contraction
- Warner Music Group and ZoomInfo Technologies raised a combined $2.9 billion through IPOs
Top Three Market Headlines
Stunning Job Growth in May: The Labor Department reported last Friday that nonfarm payrolls grew by 2.5 million in May, the largest monthly increase since the statistic’s inception in 1939, and a surprising reversal from April, when nearly 21 million jobs were lost. Meanwhile, the jobless rate declined to 13.3% from 14.7% in April, far better than the 19% economists had expected. Most of the growth in May came from jobs classified as temporary layoffs, which had accounted for 78% of job losses the month prior. Nearly half of the gains in May were in the hospitality and leisure sectors, with jobs in bars and restaurants increasing by 1.4 million as states began to re-open. After months of losses, May’s jobs report could be an early indication that the U.S economy is on the road to recovery.
Business Surveys Modestly Improved in May: As business activity slowly begins to resume, surveys of business executives released last week showed the U.S. economy still contracted in May, but at a lesser pace. The Institute for Supply Management (ISM) Manufacturing Index rose to 43.1 in May from an 11-year low of 41.5 in April (a reading below 50 indicates economic contraction). While respondents cited worsening production and new orders, the trajectory of overall manufacturing activity improved. The ISM Non-Manufacturing Index rose as well, increasing to 45.4 last month from 41.8 in April. This was the second straight month of contraction for the nonmanufacturing sector, following 122 months of expansion.
IPO Market Reopens: The IPO market flashed signs of revitalization last week, seeing its busiest week of the year as eight companies came to market successfully. Headlined by Warner Music Group and ZoomInfo Technologies, all of the deals were priced at or above their target ranges, a sign of strong investor demand. The listings breathed life into what had been a dormant primary issuance market in the aftermath of the stock market’s severe first quarter decline: prior to last week, total IPO listings and proceeds were down 42% and 64%, respectively, from the same time last year.