With more than 99% of S&P 500 companies having reported, the Q2 earnings season has wrapped up in an impressive fashion.
Key metrics for Q2 2021, according to FactSet, include the following:
Note: The Energy sector is coming off a loss in Q2 2020, preventing a mathematical projection for earnings growth.
While earnings for Q2 2021 were in many ways the best in over a decade, some recent data suggests a weakening in consumer sentiment and activity. Many analysts attribute this to the spread of the COVID-19 delta variant, the impact of stronger inflation, and the time elapsed since the federal government’s direct stimulus checks in the spring.
According to The Associated Press,
Source: The Conference Board
Source: Trading Economics, U.S. Census Bureau
The August employment data from the U.S. Bureau of Labor Statistics was a huge miss, with the economy adding just 235,000 new positions. This was less than a third of most analyst expectations, which were for approximately 720,000 new hires, according to CNBC.
The unemployment rate did drop “to 5.2% from 5.4%, in line with estimates,” says CNBC.
Barron’s, however, noted that the report wasn’t all negative, at least in terms of overall 2021 jobs growth:
Source: Trading Economics, U.S. Bureau of Labor Statistics
‘Reopening’ consumer activity declines
According to The Washington Post, the impact of the delta variant spread has had multiple impacts on consumer activity:
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