Thursday is the employment data day. Unless something unexpected happens, the U.S. job market is experiencing a mild cooling, which will not have a significant impact on the market and interest rate cuts.
In simple terms, the current job market is in a mild cooling phase that is neither too hot nor too cold.
This Thursday's data is very likely to be neither too hot to raise inflation concerns nor too poor to indicate an economic recession.
Let me explain why:
The unemployment rate in July was 4.2%, and wages grew by 3.9% year-on-year. The data is acceptable, but the number of job openings is decreasing, and the employee turnover rate is low (indicating that people are hesitant to change jobs), while the number of people receiving unemployment benefits is slowly rising.
This also suggests that the unemployment rate, to be announced in early September for August, has a slight risk of rising to 4.3%, and the pressure for wage increases is currently within a controllable range.
Observing the specific data is also quite simple. If it is weaker than expected (initial claims > 245,000 or continuing claims > 2 million), expectations for interest rate cuts will increase, which is positive for crypto; conversely, it would be negative, but of course, it won't have a huge impact.
Personally, I slightly lean towards the scenario of a softening job market (interest rates falling, which is good for risk assets), but I will remain cautious, as wage growth is still hovering around 4%, and we cannot completely rule out the possibility of inflation stickiness.