Is the US Unemployment Rate Expected to Rise, Leading to Interest Rate Cut by the End of the Year? Bitcoin Surpasses 63K.
The US Department of Labor announced yesterday that the non-farm payroll employment in April only added 175,000 people, which is lower than analysts’ expectations, and the unemployment rate rose to 3.9%. The market expects the Federal Reserve to cut interest rates by the end of the year, resulting in a 450-point increase in the Dow Jones Industrial Average and Bitcoin breaking through 63,000 yuan.
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Non-farm payroll lower than expected, unemployment rate reaches 3.9%
Federal Reserve stops raising interest rates
Bitcoin breaks through 63K
The US labor market is gradually slowing down. According to the Department of Labor’s announcement yesterday, the non-farm payroll employment in April only added 175,000 people, which is lower than analysts’ expectations of 241,000 people. This figure is the lowest since October 2023. The unemployment rate increased slightly from the previous month’s 3.8% to 3.9%.
US non-farm payroll employment and unemployment rate historical data
(Data source)
There is usually a negative correlation between the unemployment rate and future inflation, so the slowdown in the job market in April seems to be anticipating the end of inflation, and the market expects to see a rate cut this year.
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As expected by the market, the Federal Reserve maintained interest rates unchanged for the sixth consecutive time this week. Powell stated that although the inflation control target has not yet been achieved, the next interest rate policy is unlikely to be another rate hike, which has generally led to optimistic expectations in the market.
(Federal Reserve maintains interest rates unchanged, Powell says “next step is unlikely to be a rate hike”)
However, Powell also emphasized that the assessment will be based on the actual inflation situation.
Benefiting from the above market news, the Dow Jones Industrial Average rose by 450 points (1.18%). The price of Bitcoin continued to rise from 59K to 63K this morning, with a daily increase of about 7%, while Ethereum reached $3,100, with an increase of about 4.5%.
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Further reading:
Federal Reserve maintains interest rates unchanged, Powell says “next step is unlikely to be a rate hike”
Get a complete view of tonight’s expected results of the Federal Reserve, with the possibility of adjusting interest rates almost zero.
