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June 3, 2021
Reopenings within the services sector of the US economy are continuing as vaccination rates approach 50% of the population. Difficulty in finding workers in these travel/leisure industries is now the most acute problem, but wage increases and expiration of extended unemployment benefits should ease labor supply concerns. High savings rates and pent-up consumer demand will continue to drive the economy and force production and manufacturing to catch up to the higher spending.
European economies should emerge this quarter from the double dip recession brought on by their general inability to control the third wave of Covid19 and the resulting lockdowns of important parts of their economies. The UK and the continent as a whole is becoming more efficient in delivering inoculations.
Japan benefits from the strength of their export industries, but their perennially weak consumer spending sector will suffer from the current virus wave which has extended states of emergency in various prefectures. Relatedly, the Tokyo Olympics, expected to be a boon for higher consumer spending, is currently in jeopardy.
Having been the first major economy to emerge from the virus induced recession, China is expected to settle back to their more normal trend GDP growth of 4-5% for the remainder of the year as government officials scale back policy support. Of particular concern is the potential impact of the global onshoring trend on their manufacturing industries.
Monetary Policies/Currencies
Commodities
The global economy continues to slowly recover from the brief, but severe pandemic induced recession. The recovery has been uneven and loose monetary policy remains necessary to ensure its continuation. Inflationary implications will develop, but do not expect many central banks to meaningfully tighten unless and until these price increases are sustained. This remains a favorable environment for equity prices as we do not expect rates to rise meaningfully over the coming months.
For more market insights, contact a Cerity Partners advisor or visit the thought leadership section of ceritypartners.com.
Cerity Partners LLC (“Cerity Partners”) is an SEC-registered investment adviser with offices in California, Colorado, Illinois, Ohio, Massachusetts, Michigan, New York and Texas. Registration of an Investment Adviser does not imply any level of skill or training. This commentary is limited to general information about Cerity Partners’ services and its financial market outlook, which may not be suitable for everyone. The information contained herein should not be construed as personalized investment, tax, or legal advice. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this commentary will come to pass. Investing in the financial markets involves risk, including the risk of loss of the principal amount invested; and may not be appropriate for everyone. The information presented is subject to change without notice and should not be considered as an offer to sell or a solicitation of an offer to buy any security. All information is deemed reliable but is not guaranteed. For information pertaining to the registration status of Cerity Partners, please contact us or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). For additional information about Cerity Partners, including fees and services, send for our disclosure statement as set forth on Form CRS and ADV Part 2A using the contact information herein. Please read the disclosure statement carefully before you invest or send money.
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