The Labor Market is what had everyone’s attention this week. US Unemployment beat expectations of 12.3% this month to settle at 11.1%. The number of unemployed people fell by 3.2 million to 17.8 million as they returned to the labor market. This is a good sign, as it shows that the economy is recovering faster than expected. This data does not account for the recent rise in new cases – which has caused restaurants and businesses to dial back their reopening plans. Many economists also believe that the numbers do not show the full scale of damage due to people still classified as employed, but absent from work.
Stocks were able to post gains before the market closed for Independence Day after the improvements in employment.
The US trade deficit widened in May as both exports and imports fell. Exports dropped 4.4% to $144.5 billion and imports declined by 0.9% to $199.1 billion. This makes the deficit the widest it has been since December 2018. This will likely continue as household demand for goods remains restrained.
Consumption habits have begun to change more and more from the pandemic. While consumers are starting to shop again, their patterns indicate caution and fear. The drop in travel and hospitality are a testament to this. Furniture sales have skyrocketed though, as have outdoor leisure and sporting goods. Since bars will remain closed for now, wine and liquor sales have shot up over 50%. Households are getting sick of cooking at home and are looking to companies like GrubHub, Postmates, and Uber Eats for delivery, boosting their revenue.
