Every month the US Department of Labor announces figures on employment. This is important because it gives an indication of the state of the economy. Today it was time for new job figures again, and they are worrying.
Labor market vs gasping for breath
The economic engine of the United States is starting to show serious cures. In July, only 73,000 new jobs were added, while economists counted on 115,000. That is a big disappointment, who indicates that the economy may cool down faster than expected.
It doesn’t stop there. The figures for May and June have been considerably adjusted down. In May, 144,000 new jobs were first discussed, but that number was reduced to only 19,000. In June it fell from 147,000 to 14,000. Together, 258,000 jobs have disappeared from the statistics in one fell swoop.
Analyst Kobeissi calls the adjustment “bizarre” and states that this is equivalent to the loss of a city such as Scottsdale in Arizona, where around 250,000 people live. According to him, there are now two possible scenarios: whether the American labor market slides towards a recession, or something is thoroughly wrong with the way the data is collected.
What does this mean for crypto?
At first glance, the weak job figures seem bad news. But for the financial and cryptomarkt it can turn out positively. A weakening economy puts pressure on the Federal Reserve (FED) to lower interest rates. And lower interest rates make borrow cheaper, which makes more capital available that are looking for returns – for example in shares or crypto.
The market responded immediately. On the Futuresmarkt, traders now estimate the chance of an interest rate reduction in September at 76.9 percent. Yesterday that was only 37.7 percent. That is a remarkable shift within one day.
Source: https://newsbit.nl/amerikaanse-bnanencijfers-schokken-258-000-banen-verdwenen-komt-er-een-renteverlaging/
