- The ISM Manufacturing Index registered 61.2 in May, while the ISM Services Index came in at 64.0
- The OECD raised its 2021 global economic growth outlook to 5.8%
- The U.S. economy added 559,000 jobs in February, while the unemployment rate fell to 5.8%
Top Three Market Headlines
Strong U.S. Economic Rebound Continues in May: U.S. business activity continued to expand at a healthy clip in May, according to surveys of business executives released last week from the Institute of Supply Management (ISM). The ISM Manufacturing Index registered 61.2 in May, up from 60.7 in the prior month. (A reading above 50 indicates an expansion of activity, while a sub-50 mark reflects contraction.) The services sector also continued to grow in May as the ISM Services index increased 1.3 points higher from the prior month to 64.0. May marked the twelfth consecutive month both indices signaled expansion after having fallen below 50 in April 2020.
The OECD Raises Global Growth Outlooks: The Organization for Economic Cooperation and Development (OECD) last week raised its outlook for 2021 global economic growth to 5.8%, an increase from its March estimate of 5.6%. As recently as December 20201, the OECD had projected 2020 growth of 4.2%. Key to the OECD’s improved outlook is the successful rollout of Covid-19 vaccines in advanced economies. For the U.S., the OECD expects growth of 6.9% this year, up from its previous estimate of 6.5%. At the same time, the OECD noted that some emerging market economies may continue to experience slower growth, due to slower vaccination deployment and less fiscal policy support.
Hiring Accelerates in May: The Labor Department reported last week that U.S. nonfarm payrolls increased by 559,000 in May, marking an uptick from April but still below market expectations. Most of the gains in May occurred in the leisure and hospitality, public and private education, and health care industries, accounting for 482,000 jobs or 86% of the job growth in May. Meanwhile, the unemployment rate declined by 0.3 percentage points to 5.8%; while this is well below the 14.8% peak registered in April of last year, it remains above the pre-pandemic rate of 3.5%.