A recent economic downturn in the United States has resulted in a significant drop in employment levels this August, raising concerns among experts.
Why Is the US Employment Rate Dropping?
The employment report reveals a decrease in the manufacturing sector by 12,000 jobs, with an annual earnings increase of just 3.7%, short of the expected 3.8%. Simultaneously, labor force participation rates stagnated at 62.3%, and unemployment rose to 4.3%. Only 22,000 new jobs were created in August, marking one of the poorest outcomes in recent years.
Will the Fed Cut Interest Rates?
Yes, the current trajectory unambiguously indicates a weakening job market, urging the Federal Reserve to consider lowering interest rates. The detailed report disclosed an increase of over 385,000 individuals jobless for longer than 27 weeks within the past year as well as a rise of 722,000 in individuals actively seeking employment.
Impact on the Cryptocurrency Market
"The Federal Reserve’s upcoming actions may dramatically affect the crypto market valuations," a spokesperson noted. Monetary easing could invigorate burgeoning cryptocurrency markets driven by institutional demands and regulatory factors. Additionally, expectations for a potential 50 basis point cut have risen amidst shifting perspectives since Powell’s recent statements.
The declining job market in the US suggests potential shifts in financial policy that may significantly influence cryptocurrency markets in the near future.
