Job separations in April decreased to 4.8 million from May’s 9.9 million, but were still at the second highest recorded level. Layoffs decreased to 7.7 million (-3.773 million), with private layoffs dropping -3.816 million and government layoffs increasing by +43,000. Layoffs decreased significantly for accommodation/food services (-2.738 million) and retail (‑338,000), but increased for construction (+85,000), information (+53,000), and wholesale trade (+50,000). Job openings fell -965,000 to 5.0 million, with the largest drops in job openings for professional/business services (-309,000), health care/social assistance (‑115,000), and retail (-113,000). Over the 12 months ending in April, there were a total of 67.2 million hires and 81.1 million separations, yielding a net employment loss of -13.9 million jobs.

Consumer prices dropped -0.1% in May in the third consecutive decline after a -0.8% drop in April and -0.4% in March. Food prices continued to grow, but at a +0.7% rate for May vs +1.5% for April. Gasoline prices slowed their decline from -20.6% to -3.5%, slowing the decline of overall energy costs from a -10.1% drop to -1.8%. Core prices, which remove the volatile food and energy components, were down -0.1% vs. -0.4% in April. Yearly inflation was up +0.1%, dragged down largely by a -18.9% drop in energy costs. Yearly core inflation was up +1.2%, with yearly gains for medical services (+5.9%), shelter (+2.5%), and medical commodities (+0.8%) offset by drops for transportation services (-8.7%), apparel (-7.9%), used vehicles (-0.4%), and new vehicles (-0.3%).

The Federal Reserve noted that financial conditions had improved, partly due to policy measures supporting the economy, and restated that it would maintain the prime rate in the 0.0% - 0.25% range “until it is confident that the economy has weathered recent events”. They also noted that, in order to support the flow of credit, they would continue to increase their Treasury securities and mortgage backed securities holdings at least at the current pace. The Federal Reserve updated their economic projections, estimating 2020 GDP at -6.5%, unemployment at 9.3%, and core inflation at 1.0%. In a press conference after the statement’s release, Chairman Powell noted that projections were uncertain and depended strongly on the path of the pandemic, but that the general belief was that recovery would begin in the second half of 2020 and continue for a couple of years after that, with rates continuing to be maintained at the current level.