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Market Recession Fears Fade as Companies Keep Hiring



June 5, 2023


It’s getting hard to imagine a recession is imminent when U.S. payroll growth is the highest since January and job openings are above 10 million.


In May, U.S. payrolls surged by 339,000 to 156.1 million, versus estimates for an additional 195,000 jobs and April’s upwardly revised 294,000. The news follows April’s unexpected rise in new job openings to 10.1 million from 9.8 million in the previous month.


May’s gains in non-farm employment were driven by service-providing sectors. So-called “high-touch” service sectors, like hospitality and dining, have accounted for nearly two-thirds of all jobs added in the last three months, according to Bank of America Global Research.1


The S&P 500 pierced its long-held 4200 resistance level last Friday, as May’s payroll number boosted hopes for a soft landing.


Although we have been pleasantly surprised by the economy’s resilience, investors should be mindful that there are still some potential headwinds. Due to regional bank problems, a pullback in lending is possible in the months ahead. Also, recent PMI manufacturing orders suggest the economy's goods sector is in contraction.








1. BofA Research, Labor Market Watch. June 5, 2023.


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