Interpretation Report on Non-Farm Payrolls and Unemployment Rate for August 2nd

After the non-farm payroll data came out yesterday, the market experienced a big dump. Since fewer people were watching the live broadcast, I posted an update to explain and clarify things for everyone so as not to mislead them.
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Figure 1, after the non-farm data was released at 8:30, the predicted value: 175K, the published value 114K, I don't know if anyone still remembers last month's data? The non-farm data of 206K fell by almost half. You can see on the website of the U.S. Department of Labor that this data is the lowest since December 2020, which is a full three standard deviations below expectations.
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Figure 2. The US Labor Department has significantly revised down the non-farm data from the past few months. This is true for every country; the data is inflated, which means that the previous employment market Favourable Information was also inflated, and it will be revised down, only this time the revision is greater than before.
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Figure 3, the unemployment rate has surged to 4.3%, well above the expected 4.1%;
Actually, when it comes to this, you may have heard it in other live channels. The data released last night is a major Favourable Information, as it increased the probability of a rate cut! Will the rate cut come early? If we only analyze up to this point, it is indeed Favourable Information. However, the unemployment rate reaching 4.3% and triggering the sahm rule as shown in Figure 3, this rule is often used by economists to predict economic trends. I explained this rule to everyone using ChatGPT in Figure 4.
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Figure 4 Substitute into the formula: the current unemployment rate is 4.3%, the lowest unemployment rate in the past 12 months is 3.7%, 4.3% - 3.7% = 0.6% > 0.5% (triggering the recession threshold), which can be regarded as one of the conditions for entering a recession, also known as a "hard landing" in the economy.
This is also why the US stock market plunged significantly yesterday, causing a collective decline in the three major indices.
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The relationship between the US stock market and the crypto world is like the relationship between the mouth and the teeth. When the lips are cold, the teeth will be lost. 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 cycle will only cause an economic crisis and result in a triple kill of stocks, exchange rates, and bonds. Can the crypto world break free from this and have 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 priced 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 high and low points. You can refer to the three major indexes, all of which reached historical highs in 21 years.
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Currently, it is only one of the triggers for a possible US economic recession, causing assets denominated in US dollars to start forming a bubble. We can refer to the period from 2019 to 2020, when the global economy entered a downturn due to the mask issue. In 2020, the US entered a recessionary period, and the Federal Reserve began unlimited quantitative easing (Unlimited QE) in early 2020 to address the crisis. This policy can be understood as real funds flowing into the crypto world's ETF or interest rate cuts. However, at that time, the US stock market did not experience a big pump in 2020, but started to soar after entering the recovery period 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.
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Currently, only one piece of data indicates the possibility of the United States entering a recessionary period. There is no need to panic too much. This is a good time for precipitation. Referring to the unlimited QE from 2020 to 2021 before entering the crazy big bull, 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'm writing it as a reference, typing it manually. If you have the patience to read this far, please give the teacher a like and leave a comment. Thank you all and wish you all the patience to endure loneliness, hold onto Spot, and ultimately achieve your desired financial freedom.