Furthermore, the backdrop of rising wages, increasing Covod-19 vaccination rates, and expiration of unemployment benefits, which will affect 11 million people, should support an increasing labor pool despite last week’s disappointing jobs report, he said.
“With a record 10 million job openings, labor supply appears to be the primary challenge currently facing the labor market, and the pool should expand as schools reopen given the higher rates of labor force exits among mothers in particular,” he said.
Another headwind that is impacting the economy is that consumer confidence has plunged over the last two months. But when consumer confidence has historically seen a significant decline, the S&P 500 Index has delivered a 12.9% return over the subsequent year, he sadi. Equally as encouraging is the rebound that has occurred in the weekly Consumer Comfort Index, which reached a new post-pandemic high last week, Schulze said in the blog.
Another reason to be optimistic about the economy moving into fall, according to Schulze, is that the most recent Institute of Supply Management Manufacturing report was very strong, with both the total and the "new orders" rates beating expectations and accelerating from the prior month.