Strong U.S. non-farm payrolls, Wall Street bemoans: wrong report at wrong time

The U.S. November non-agricultural employment report released on December 2 was unexpectedly strong, but the good news of employment became bad news for the market, which led to lower U.S. stocks, a plunge in U.S. bond prices, and a surge in yields. The U.S. dollar turned up, suppressing non-U.S. Commodities such as gold were under pressure. Media commented that the non-agricultural employment report dampened the market’s expectations that the Fed would reduce its tightening efforts because the economy was weak enough, and Wall Street people lamented. | Related Reading (Wall Street Insights)

use Ruolan

A strong employment data, no matter how you say it, is strong evidence that the country’s economy is fundamentally positive. Why did the Wall Street people lament when the employment data was released, and the stock market also plunged? This may be because the Fed’s actions over the past two years are strongly linked to employment data.

The Federal Reserve has raised interest rates frequently this year because of the problem of inflation. The basis for making judgments is firstly the inflation data and secondly the employment rate data. This can ensure that the inflation rate will be reduced without affecting the fundamentals of employment.

Although the current inflation rate has dropped in the afternoon, the strong data on the employment rate may mean that the Federal Reserve may not slow down the pace of raising interest rates in the next step. This is a bad news for the financial market. How about the economic fundamentals, they only care about whether it will affect their rate of return.

This article is reproduced from: https://www.fortunechina.com/jingxuan/24971.htm
This site is only for collection, and the copyright belongs to the original author.