Bumper US jobs data has provided further evidence of building momentum in the US economy. The increase of 916,000 jobs last month was far ahead of consensus estimates, and means that the US labour market has now recovered over 60% of the 22 million jobs lost during the pandemic. The composition of outstanding job losses provides encouragement that further re-hiring will come quickly. The leisure and hospitality industry is the worst hit with employment still down by over three million since February 2020, but the vaccine rollout is rapidly improving the outlook, as evidenced by the US Institute for Supply Management Services survey now standing at record levels. Barring a significant pandemic setback, strengthening economic data should put further upward pressure on US bond yields over the coming months, which in turn could bode well for the rotation towards more cyclical parts of the stock market to continue.

US labour market recovery is gathering pace

Millions, US non-farm payroll employment