Interpretation Report on Non-farm Payrolls and Unemployment Rate of August 2

After yesterday's non-farm payroll, the market experienced a big dump because there were fewer viewers watching the live stream, so I posted an update to explain and prevent any misinformation.
-
Figure 1, after the non-farm payroll data was released at 8:30, the forecast value was 175k, and the actual value was 114k. Does anyone remember the data from last month? The non-farm payroll data of 206k fell by almost half. You can see on the website of the US Department of Labor that this data is the lowest since December 2020, almost three standard deviations below expectations.
-
Figure 2, the US Labor Department has once again significantly revised down the non-farm data for the previous few months. This is the case for every country, as the data aspect is all watered down, indicating that the previous labor market Favourable Information also contained a large amount of water, and all will be revised downwards. The extent of this revision is just greater than before.
-
Figure 3, the unemployment rate has surged to 4.3%, well above the expected 4.1%;
Actually, maybe everyone could hear about it in other live channels. The data released last night is a major Favourable Information because it increased the probability of an interest rate cut! Will the interest rate cut come early? If we only analyze to here, it is indeed Favourable Information. However, the unemployment rate reaching 4.3% triggered the sahm rule, which is often used by economists to predict economic trends. I explained this rule to everyone using ChatGPT in Figure 4.
-
Substituting Figure 4 into the formula: the current unemployment rate is 4.3%, and the lowest unemployment rate in the past 12 months was 3.7%. 4.3%-3.7% = 0.6% > 0.5% (thus triggering the recession threshold) can be regarded as one of the conditions for entering a recession, also known as a "hard landing".
This is also why the US stock market crashed sharply yesterday, causing all three major indexes to fall collectively.
-
The relationship between the US stock market and the crypto world is like the relationship between the lips and teeth. If the US stock market is compared to the vast ocean, then the crypto world is just a small stream. The Favourable Information of interest rate cuts must be a major Favourable Information equivalent to ETF. In history, entering an economic recession will only trigger an economic crisis and cause a triple kill of stocks, exchange rates, and bonds. Can the crypto world develop an independent market? Definitely not. The reasons are: 1) Only when the US economy achieves a soft landing without triggering an economic recession + interest rate cycle, all assets denominated in US dollars will rise, and the crypto world is also denominated in US dollars, not in RMB; 2) It has been mentioned in the live broadcast that the trend of BTC is highly consistent with the US stock market, with only a time difference in highs and lows. You can refer to the three major indices, all of which reached historical highs in 2021.
-
Currently, it's just one of the triggers for a possible U.S. economic recession, causing assets priced in dollars to start squeezing bubbles. You can refer to 2019-2020 when, due to mask reasons, the global economy entered a downturn, and the U.S. entered a recession in 2020. In response to the crisis, the Fed began unlimited quantitative easing (Unlimited Quantitative Easing) in early 2020, which is often referred to as unlimited QE. This policy can be understood as real funds flowing into the crypto world's ETF or interest rate cuts. However, at that time, the U.S. stock market did not experience a big pump in 2020, but began to soar after entering the recovery phase in 2021. In the same year, BTC also reached a historical high due to the influx of funds from unlimited QE, achieving financial freedom for some people.
-
Currently, only one piece of data suggests the possibility of the United States entering a recession, so there is no need to panic too much. This is a good time for precipitation. Refer to the infinite QE in 2020 and the crazy bull market in 2021. Everyone just needs to hold on patiently. It's been a long time since I wrote an analysis of the US stock market. Today, I wrote this as a reference, purely handwritten. If you have the patience to read this far, please give the teacher a like and leave a comment. Thank you everyone. I hope that those who have the patience to read this far can withstand loneliness, hold on to the spot, and ultimately achieve the financial freedom they desire.