• The EIU nowcast for the US economy for Q2 2020 jumped to -11.48%
  (quarter-on-quarter) as of last week, compared with -15.60% during the week ending May 29th.

• Surprises from employment data had the most impact on the large increase in the nowcast estimate last week.

• ADP’s Nonfarm Private Payroll data for May showed that private business laid off 2.76 million people, which was much lower than projections.

• The biggest surprise was in the Nonfarm Payroll data from BLS, which showed an unanticipated addition for 2.5 million jobs in the month of May, against the expectation of further job losses following record-high job losses in April.

  • Even with the significant increase in May, overall employment still remains 19.5 million lower than pre-Covid 19 levels in February 2020.

• However, the BLS have noted disruptions in survey responses – given the lockdown – and misclassification errors in the methodology may have led to an overestimation of the data. Accordingly, we expect this data to be revised lower in the subsequent month’s data releases.

• The ISM Purchasers Manufacturing and Non-manufacturing PMI improved slightly in relation to April data. However, they continue to remain in the contractionary zone (below 50).

• Overall, the data seems to suggest that the US economy has managed to turn a corner, but it should be noted that activity still remains significantly weak and well below pre-lockdown levels.

• To get the full background to our EIU Nowcast, view our methodology and FAQs page or contact us using the form below.

Data releases (last week)

Data releases (current week)