July 2022 Middle Market Monitor

Economic indicators continued to present uncertainty in June, as the unemployment rate remained constant at 3.6% for the fourth month in a row and the labor force participation rate remained at 62.2%. The Consumer Confidence Index decreased by 4.5 points to its lowest level since February 2021 last month, as the United States continues to experience record-high inflation. Gas prices dipped 12 cents on average for the first time in months, largely due to the drop in the price of crude oil as recession fears cloud global demand outlook. Crude oil is currently hovering around $100 per barrel. The S&P 500 fluctuated significantly through June but rallied at the end of the month to end with a slight gain. Both the Nasdaq Composite and Dow Jones Industrial indices finished slightly up over the course of the month. Earlier in June, the Federal Open Market Committee instituted an interest rate rise of 75 basis points, the most aggressive hike since 1994. On a month-over-month basis, total middle-market M&A activity and leveraged buyouts increased slightly. Due to large amounts of capital chasing deals and a limited supply of high-quality companies in the market, the outlook for middle market M&A transactions remains optimistic for the foreseeable future.