A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
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Richard Pontius Foreign Exchange Advisor
There are clear indications that the U.S. economy, along with other nations’ economies, is recovering rapidly. Data released today reflects a strong surge in consumption during March. Personal consumption rose 3.6% during the month, in line with rising personal income figures. Personal income backed by stimulus checks spiked with a 21.1% increase during the month. The implication from that jump in personal income is that consumption will rise over the ensuing months as those funds are used to purchase goods and services. Much of this increase in spending has been reflected in durable goods, with vehicle sales up 15.1% from pre-pandemic levels and household goods purchases up by 16.6% over the same period. Housing is enjoying an increase of 14.4% even as surging prices for lumber drive costs higher.
Consumer demand is ready to be released as we enter a period in which restrictions are being lifted. Disneyland reopens today, and it was just announced that New York will fully reopen on July 1. What has been widely expected in terms of anticipated rising economic activity seems to be truly happening. Travel, while at greatly reduced levels from just over a year ago, is rebounding, with notable increases in pricing during the summer months.
While the U.S. appears to be on decent footing for the days ahead, global conditions are uneven. The eurozone is still struggling with uneven success against COVID-19 and the recent spike of COVID-19 cases in India and Brazil shows that it will take some time before global demand is balanced. For now, the U.S. shows great promise. Further evidence of gains in the employment sector should lead to broader economic strength in the months ahead.
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