Was April the bottom?
|U.S. Review
Was April the Bottom?
- Data this week continued to suggest the U.S. economy hit rock bottom in April. Still, it is a long road to recovery and the pick- up in economic activity will be gradual.
- In what was a surprising jobs report, the U.S. labor market added 2.5 million jobs in May and the unemployment rate fell to 13.3%. The bottom line: hiring started to pick-up earlier than expected as states began to loosen restrictions in May.
- Survey evidence from the ISM further supports the notion that economic activity has bottomed, as does mobility data, though they exemplify just how gradual the rebound may be.
Global Review
Trio of Central Bank Meetings Dominate the Week
- There was a trio of key central bank meetings this week, with the Reserve Bank of Australia (RBA) kicking the week off. As expected, the RBA maintained its main policy rate and target for the three-year sovereign bond yield.
- The European Central Bank increased the Pandemic Emergency Purchase Program by €600 billion, extended the timeline for purchases to June 2021 and announced maturing holdings would be reinvested until at least the end of 2022.
- The Bank of Canada left its main policy rate unchanged and modestly scaled back some provisions aimed at providing liquidity in financial markets.
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