The Economy
The U.S. economy added 2.5 million jobs in May, a surprising jump as businesses across the nation began to reopen from the COVID-19 shutdown. The unemployment rate fell to 13.3%; this is still high by historical standards, but much better than expected and still an improvement over April’s jobless rate of 14.7%.
With restrictions due to COVID-19 gradually being lifted on state by state basis, officials are looking for signs of an economic rebound. However, so far the rebound remains slow. Information collected by Goldman Sachs and the New York Federal Reserve showed the economy continuing near bottom with no sign of further decline, but no clear upward trend yet either.
Key Indicators
The Architectural Billings Index fell again in April, following the large decline in March. The ABI registered at 29.3, a new all-time low for the index.
The May Purchasing Managers Index registered at 43.1%, up 1.6 points from April’s reading. This indicates expansion in the overall economy after April’s contraction. The New Orders Index registered at 31.8%, an increase of 4.7 points from April’s reading of 27.1%. The Production Index registered at 33.2%, up 5.7 points compared to April.
The Consumer Confidence Index held steady in May, following a rather sharp decline in April. The index registered at 86.6, up from 85.7 in April. Short-term expectations moderately increased as the gradual re-opening of the economy helped improved consumers’ spirits. However, consumers remain concerned about their financial statuses.
The Steel Industry
Due to the effects of the COVID-19 pandemic lockdown, global steel demand is expected to decrease by 6.40% year on year in 2020 according to the World Steel Association. They expect steel demand to drop by 1.65 billion tonnes for June 2020, but to recover to 1.72 billion tonnes in 2021.
U.S. energy firms cut the number of oil and natural gas rigs operating to a record low of 301 in the week to May 29. Analysts expect U.S. firms to continue chopping rigs for the rest of the year and the count will remain low in 2021 and 2022.
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