3 Key Takeaways From The May U.S. Jobs Report

The engines of commerce are firing: Global growth takes off in May

Recently released manufacturing PMI surveys from May in France, Germany, the UK and China all point to record growth in the sector, Ristuben said. “While these lofty numbers aren’t surprising, it’s definitely gratifying to see that the very, very high expectations for growth are starting to verify worldwide,” he stated, noting that consensus expectations are for 5% annual growth in GDP (gross domestic product) in Europe, and 7% in the U.S.

Ristuben said that the growth in eurozone manufacturing last month was particularly impressive, with IHS Markit’s PMI for the region hitting a record high of 63.1 in May—beating the previous high of 62.5 set just one month earlier. A reading above 50 indicates expansionary conditions, while a reading below 50 indicates contractionary conditions. Improvement was also noted in Europe’s services sector, Ristuben added, with IHS Markit’s eurozone services PMI climbing to 55.2. “Due to the initially slower rollout of vaccines in Europe, the region’s services sector has been lagging a bit behind the even-more explosive growth noted in the U.S., but the latest data shows it‘s really starting to come alive more,” he stated.

Ristuben also stressed that the rapid boom in growth across both sectors is not just limited to Europe, the U.S., and China. As evidence, he pointed to the just-released J.P.Morgan Global Composite PMI for May, which hit a level of 58.4—its highest reading in 15 years. “Ultimately, this shows that the engines of commerce are really beginning to fire across the board,” he remarked.

Market outlook: Will equities continue moving higher?

Turning to equity markets, Ristuben noted that most major indices have racked up four straight months of positive returns—which he said is often the case during the really early stages of the market cycle. “The early part of the business cycle generally serves as a powerful support mechanism for equities,” he observed.

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