The economic recovery in the U.S. has continued to be choppy and result in many surprises. With growth expected to be 10% for the second quarter and 7% in the third quarter, the economy is bouncing back as the pandemic slowly recedes. But the impact on certain industries and changes in behavior make short-term forecasting challenging.
This week, the June employment report to be released on Friday should show strength. The expectation is for almost 700,000 new jobs to be added during the month, with the unemployment rate falling to 5.7%. The April and May reports disappointed the markets because the number of new jobs was lower than expected. The availability of new jobs continues to be greater than the number of people choosing to accept them. There are several theories for why this is happening but until an equilibrium is reached, it will be difficult to determine the true strength of the economy. Also, the continuing shortage of goods and resulting long wait times will create distortions that cloud the ability to accurately assess economic strength.
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