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“Today’s Employment Report supports our view that we will see a decent rebound in GDP growth in Q3,” noted Rabobank analysts.

Key quotes

“However, the extreme swings in economic activity that we are now seeing are caused by the lockdown and reopening of the economy, and it will take until Q4 before we see old fashioned – and more muted – demand fluctuations driving GDP growth. Then we will see how strong the recovery really is.”

“On June 10, the FOMC is expected to publish its first set of economic projections since the outbreak of Covid-19, after conveniently skipping the March round and leaving it to others to prepare the public for the awful economic data that we have seen.”

“In the near-term the Committee is likely to focus on working out its forward guidance on rates and asset purchases. In addition to tweaking its formal statement, the dot plot also gives the FOMC an opportunity to provide forward guidance. Meanwhile, the Board of Governors will continue to expand its special lending facilities.”