Super Typhoon Hits the Non-Farm Sector! Is the Fed's Policy Heading in a New Direction?
Intelligence from our financial APP reveals that the "melon" of global finance has exploded like a super typhoon this summer! The latest non-farm employment data has sent market expectations flying - literally! A whopping 26,000 jobs were cut from the previous two months' numbers, making the Fed's policy direction instantly uncertain. Global stocks, bonds, and currencies are collectively shaking!
One: How Strong is this Non-Farm Typhoon?
July non-farm employment rose by 7,300 people, seemingly "not bad"? But the previous two months' numbers were directly cut to ribbons:
June's data was revised from 14.7 million to 1.4 million; May's from 14.4 million to 1.9 million - a total of 25.8 million jobs lost! This is the worst record since June 2020, when the COVID-19 pandemic was raging!
Unemployment rates rose to 4.248% (approximately 4.2%, just one step away from 4.3%). Labor participation rates also decreased... Initially, markets thought that the US labor market was "still relatively stable", but this data revision revealed the true reality of a jobless recovery - an apt description!
Two: What's Behind this Data Tsunami?
The Bureau of Labor Statistics (BLS) explained that "seasonal factors were re-calculated + more feedback received". But those in the know understand that non-farm statistics are inherently difficult to grasp (monthly employer/ household response rates are low, making data biased). Historical adjustments have occurred, but two months' losses of 26,000 jobs left even seasoned experts stunned...
Some people joked: "This is simply a statistical error... or maybe?" (rationally speaking, it's likely a statistical fluctuation, but the impact has already sent markets "exploding"!)
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