Although our country continues to endure high unemployment, we see some signs of modest improvement in the labor market. Nationally, private payroll employment rose an average of 140,000 per month over the three months ended in May, and firms have been lengthening the workweeks of their employees.
Third, the significant increase in margin calls in derivatives markets during the March 2020 turmoil also exacerbated the liquidity stress, as certain non-bank financial institutions had to liquidate assets to meet these margin calls. Some non-banks had been using money market fund shares to store and manage cash, therefore the need to meet margin calls eventually spilled over to MMFs.