The last 3 months have witnessed continued improvement in the global outlook. The vaccine rollout, combined with further policy support and the easing of restrictions, has led to a powerful recovery in the United States. The S&P 500 is expected to report its highest earnings growth in more than 10 years (FactSet), and job gains, although slower than hoped, picked up significantly in June with an encouraging 850,000 new jobs, (WSJ). While initial evidence is inconclusive as to whether expanded unemployment insurance is hindering a broader return to work, it’s possible the expiration of benefits nationwide in the first week of September will help reduce unemployment to pre-pandemic levels. The tremendous surge in economic activity is not without concerns, particularly over inflation and a potential resurgent wave of infections. However, when viewed in context with the phenomenal rate of recovery, it is expected that near term complications will prove transitory as the expansion transitions to more gradual growth, (Northern Trust).
