The employment report for February released last week showed more jobs added than expected, but the unemployment rate continues to remain elevated. The U.S. economy added 379,000 jobs versus the 200,000 expected. Meanwhile, the unemployment rate currently stands at 6.2% versus 6.3% in the prior month. The better-than-expected numbers still show that many areas of the economy have a long way to go to recover from the damage done due to the pandemic. The coming months should see a pickup in employment in some of the most impacted sectors, as vaccines and the improved infection statistics give a boost to activity.
Last week also saw Senate passage of the next pandemic stimulus bill. The new $1.9 trillion in stimulus will inject a significant boost into the economy for the next few quarters. This stimulus package is only slightly smaller than the first coronavirus bill, which amounted to $2.2 trillion. The big questions in the short term will be whether the fiscal injection gets to the most impacted areas of the economy and if it overheats other areas. I will be watching the price of oil and the 10-year Treasury yield as indicators of any overheating.
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