Opening Statement from the June 2021 Dividend Gems

Opening Statement from the June 2021 Dividend Gems

Originally published on June 21, 2021 (pre-market release)

U.S. Labor Force, Benefits, Wages & Inflation

Despite the rapid progress made in the U.S recovery efforts, the jobs data have registered two consecutive months of disappointing results. But in fairness we believe consensus estimates were quite aggressive.

Although most of the 22 million jobs lost (between February and April 2020) in the U.S. due to the coronavirus pandemic have returned, there are still 7.9 million fewer jobs now than prior to the onset of the pandemic. This is reasonable given the uncertainty from the travel and leisure sectors as well as brick-and-mortar retail. However, it is also important to note that since August 2020 the economy has recovered only 3.1 million jobs. 

Even though the unemployment rate has reached a pandemic period low of 5.8%, it remains relatively high especially when compared to the pre-pandemic low of 3.5% recorded from the February 2020 data. Meanwhile, inflation data remains on an uptrend because of pent-up demand as well as contributions from supply chain bottlenecks.

In September 2020 the Federal Reserve announced that it did not expect to raise interest rates through at least the end of 2023. This forecast was based on its estimates of economic growth, employment, and inflation. Shortly thereafter, we stated