The United States, the world's largest economy, moves with every action that affects the global nerve. Just like a pebble thrown into a calm lake, it stirs up ripples and accelerates the "heartbeat" of the global market.
On October 4th, the U.S. Department of Labor released the non-farm employment data for September. This data, which can be regarded as the "physical examination report" of the U.S. economy, directly relates to the monetary policy direction of the Federal Reserve and naturally affects the sensitive nerves of global investors. This time, the "physical examination report" shows some "unexpected" data.
2.54 million! This is the number of new non-farm employment positions added in the United States in September, far exceeding the market expectation of 150,000. It is important to note that against the backdrop of slowing global economic growth and ongoing trade frictions, the market is not optimistic about the prospects of the U.S. economy, and the expectations for the job market are even more cautious. However, this data shows the strong resilience of the U.S. job market, as if to tell the world: Don't worry, I'm still fine!
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In addition to the impressive performance of new employment figures, other data is also commendable. The U.S. unemployment rate fell to 4.1% in September, reaching a new low in nearly two years, indicating that the labor market is steadily improving. The average hourly wage increased by 0.4% month-on-month and 4% year-on-year, also showing a steady increase in wage levels, providing strong support for the continued growth of the U.S. economy.
This unexpected non-farm employment data is like a strong heart medicine, instantly igniting market enthusiasm. The first to react is the sensitive gold market. After the data was released, the spot gold price plummeted in the short term, falling nearly 0.9% at one point, and the COMEX gold futures price fell by more than 1%. It is important to note that gold has always been regarded as a "safe-haven asset." When the economic outlook is unclear, investors often choose to buy gold for risk aversion. This time, the plunge in gold prices reflects the market's increased confidence in the U.S. economy and a decrease in risk aversion.
In contrast to the gold market's plunge is the strong rise of the U.S. dollar. After the data was released, the U.S. dollar index soared straight up, breaking through the 102 mark and setting a new high in nearly a month. As the world's main reserve currency, the trend of the U.S. dollar is often closely related to the U.S. economy. Good economic data will naturally enhance the attractiveness of the U.S. dollar, attracting more investors to buy U.S. dollar assets.
The most encouraged are still the U.S. stock markets. After the non-farm employment data was released, the three major U.S. stock indices opened collectively higher, with the Nasdaq index once rising by more than 1%. Investors are delighted, as if they have seen the hope for the continued prosperity of the U.S. economy. After all, the job market is the pillar of the U.S. economy, and the strong performance of employment data undoubtedly injects new vitality into the U.S. stock market.
Behind this seemingly joyful scene, there is also a hidden concern. How will the Federal Reserve, the institution that controls the "steering wheel" of U.S. monetary policy, view this unexpected non-farm employment data? Will they slow down the pace of rate cuts as a result?
It is important to know that in order to cope with the downward pressure of the economy, the Federal Reserve has cut interest rates twice this year. The market generally expects that the Federal Reserve will cut interest rates again before the end of this year. This strong employment data, however, has cast a shadow over the Federal Reserve's interest rate reduction plan.Some economists believe that the robust performance of the job market indicates that the U.S. economy does not need additional stimulus measures. The Federal Reserve can slow down the pace of rate cuts or even pause them. After all, excessive monetary easing policies may trigger risks such as inflation, which are detrimental to the long-term healthy development of the U.S. economy.
There are also economists with different views. They argue that it is premature to claim that the U.S. economy has emerged from difficulties based solely on one set of data. The Federal Reserve should not tighten monetary policy too early, as risks such as a slowdown in global economic growth and trade frictions still exist, and the U.S. economy still faces many challenges.
How will the Federal Reserve make its decision? This is a question full of suspense. However, one thing is certain: the unexpected non-farm employment data has become an important variable affecting the future direction of the Federal Reserve's monetary policy. The Federal Reserve's every move will have a profound impact on the global financial market.