The US economy now feels a bit like a dead cat bounce, with serious signs of a rebound!

The recently released US April non-farm payroll data, under the huge impact of tariffs and the immense pressure from the US government having laid off 280,000 people, surprisingly exceeded market expectations, with job numbers reaching 170,000, significantly higher than the market's expectation of 135,000. Additionally, this month's unemployment rate decreased from last month's 4.187 to this month's 4.152. Conversely, the US economy is getting better; what is going on here?

Looking at the components, the biggest contributor to employment this time is the healthcare services sector. However, the manufacturing sector, which the understanding king is so keen on bringing back, accounts for only 8% of the US job market. It’s this 8% of job positions that has caused global turmoil, and in the end, manufacturing is still slightly declining. The most puzzling part of the entire data is, of course, government employment. With tens of thousands being laid off each month, this month shows that non-farm employment has only decreased by 9,000.

The main reason is statistical. As long as someone is considered to have left the government and received a severance package, they do not count as employed. Therefore, this employment report can be said to greatly obscure the current employment situation in the US market.

In any case, the market has chosen to believe it; both US stocks and cryptocurrencies have surged, recovering all losses since the tariff war began.

Now for some bad news: because this non-farm data is too good, the probability of a rate cut in June has dropped from over 60% back to around 40%, meaning there may not be a rate cut in June.

If the Federal Reserve does not cut rates in June and the economy does not receive stimulus, the shortages and rising prices resulting from tariffs in May and June could very likely push the US economy into a recession. The current market is likely overly optimistic, so everyone must be cautious.

So, after the long holiday on May 8th, we are about to welcome the Federal Reserve's critical May policy meeting. Under the high pressure of the understanding king's coercion and persuasion to cut rates, will Powell be able to maintain the independence of the Federal Reserve and give the market another hawkish warning by not cutting rates? We shall see.