As vaccinations pace up and Covid-19 cases fall, financial data out of the United States looks increasingly optimistic.
What’s happening: The Services PMI from the Institute for Supply Management, which uses surveys to road economic activity in the sector, just showcased its highest reading in almost two years.
Anthony Nieves, chair of the survey committee, told reporters on Wednesday, “It was a good report. “We should see a good first half to the year and an improved second half. Things are looking more positive.”
The Congressional Budget Office said that America’s real gross domestic product, is the most extensive measure of economic activity. In addition, it will grow at a pace of 4.6% in 2021. By that prediction, the economy will be back to its pre-pandemic size by the middle of the year.
Meanwhile, jobs data due on Friday is anticipated to show that the US economy created positions last month after shedding jobs in December.
Economists surveyed by Refinitiv approximate that the United States added 50,000 jobs last month. That’s weak growth, but better, of course, than posting additional losses.
Yet the range of positive data could complicate stimulus talks in Washington, where President Joe Biden is trying to find middle ground with Republicans on another round of spending.
The president’s $1.9 trillion plan released last month included a wide range of immediate aid for struggling families. It has $1,400 stimulus checks and extended unemployment benefits—also, longer-term changes, such as a $15 hourly minimum wage.
Investors are factoring significant additional expenditure from Washington into their estimation for a robust financial rebound this year. Moreover, they also think that it will pad corporate earnings. But a lot of unknowns remain.
Goldman Sachs, a strategist, said in a note to clients last week, “There are still more questions than answers regarding the timing, size and scope of additional economic stimulus,”