What We Learned About the US Economy in May

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When April turned into May, optimism was in the air. Stimulus checks were in bank accounts, coronavirus cases were plummeting, millions of Americans were getting vaccinated, the economy was reopening and the formerly unemployed were returning to work in droves.

That last part, as it turned out, not so much.

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May Was Littered With Economic Potholes

When the April jobs report was released in early May, all of that optimism simmered down quickly. Analysts had predicted 1 million new jobs, but the economy turned in only a paltry 266,000. It was a disappointment that virtually no pundits saw coming. Also, the unemployment rate that was supposed to top out at 5.8% ticked all the way up to 6.1%.

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Less than one week later, foreign criminals successfully hacked and extorted a major American energy pipeline. The fallout led to serious gas shortages across the Northeast as fuel prices began to rise nationwide.

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By the end of the month, the word and worry of the moment was inflation. Wall Street reacted to fears of rising prices with a sell-off. 

Learn: What Is Inflation and What Does It Mean When It Goes Up or Down?

It’s Not All Fire and Brimstone

By the last week of the month, the stock market had rebounded. The Fed took action to ease inflation worries and by May 26, the S&P 500 was just 1% away from its record high. Gas prices are still up — they’re expected to hit a seven-year high on Memorial Day weekend — but the pipeline incident, disturbing as it was, seems to have been an isolated incident. Many experts disagree that higher fuel prices are a sign of economy-wide inflation, and instead believe they are a temporary response to a post-pandemic release of pent-up consumer demand.

May Delivered 4 New Installments of ‘Economy Explained’

Although there was no shortage of gloomy news in May, it wasn’t all bad — at least not for anyone who enjoys learning about how the economy works. May, after all, brought several new installments of the ongoing “Economy Explained” series brought to you by GOBankingRates. In case you missed it, here’s a brief recap of the four latest articles in the series: 

  • Cost of Living: What’s Included & How’s It Calculated?
    This installment of the series covered the all-important cost-of-living index. It shows you how far your income will take you depending on where you live. 
  • Are Trade Deficits Good or Bad for the US?
    This piece examines trade deficits — which occur when a country imports more than it exports — and how they impact your wallet. Believe it or not, they do. 
  • Why Does the Consumer Price Index Matter?
    Take a look at this article if you want to learn about the Consumer Price Index. This key economic indicator reveals the rate of inflation — a hot topic in the current economy. The CPI also informs the cost-of-living index.
  • The Inverted Yield Curve and Why It Matters
    The inverted yield curve might sound like an obscure bit of economic minutia, and in a way, it is. But it’s also a rare phenomenon that tells economists when it’s time to worry — and the U.S. economy recently experienced one.

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Last updated: June 1, 2021

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.

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