Job growth in the United States slowed in June, and rising unemployment caused volatility in financial markets
U.S. non-farm payrolls rose by 206,000 in June, beating expectations but down significantly from the previous month. At the same time, the unemployment rate unexpectedly rose to 4.1%, the highest since November 2021.
Non-farm payrolls are one of the important indicators of economic growth in the United States, and it reflects employment in all industries except agriculture. The unemployment rate is another important indicator of the state of the labor market, which reflects the relationship between supply and demand in the labor market.
Although the growth of non-farm payrolls in the United States in June exceeded expectations, it fell significantly from the previous month. This could mean a slowdown in U.S. economic growth and weaker demand for corporate hiring.
Investors' expectations for the Fed's interest rate cut are growing stronger, believing that the Fed may cut interest rates to stimulate economic growth and employment. Interest rate cuts usually lead to a chain reaction such as higher bond prices, higher stock markets, and lower US dollars, which can affect the movement of financial markets as a whole.
First, the Fed considers a variety of factors when deciding whether to cut interest rates, including inflation, economic growth, employment conditions, and more. While the current rise in unemployment and slowing nonfarm payrolls growth may increase the likelihood of rate cuts, we cannot rule out the influence of other factors.
Historically, interest rate cuts tend to lead to a market rally in the short term, but the long-term effect depends on improving economic fundamentals and corporate earnings growth. Therefore, investors should pay attention to changes in economic fundamentals and corporate earnings, not just short-term market fluctuations.
At present, the global economy is facing many challenges, including trade tensions and geopolitical risks. These factors may have an impact on the U.S. economy and financial markets.
The slowdown in nonfarm payrolls growth and the rise in unemployment in June triggered volatility in financial markets and investors' expectations of a Fed rate cut. However, we need to be cautious about such expectations and pay attention to changes in economic fundamentals and the impact of other factors.
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