US Jobless Claims Released, A Strong Crypto Rally Expected
The US Department of Labor has released the initial jobless claims for this week. The initial jobless claims rose to 219,000. The economists expected the jobless claims to be at 204,000. The claims went up from the 193,000 last week to 219K this week. The spike in jobless claims can set off a crypto rally.
The initial jobless claims are the number of people filing for unemployment insurance. The strong labor market is in line with the high inflation levels in the economy. The Fed believes that a tight labor market with low unemployment can increase inflation levels in the country.
Therefore, an increase in unemployment numbers will certainly help temper the hawkish stance of the market.
How The Jobless Claims Can Start Crypto Rally
The macroeconomic environment is dictating the outlook for the crypto market. The Fed continues its restrictive monetary policymaking in an effort to curb soaring inflation. Susan Collins of the Fed warned that unemployment would rise due to the Fed’s stance.
However, Bloomberg economists believe that the number of claims still remains historically low. S&P 500 and the futures erased their losses on the back of a spike in unemployment numbers. However, initial and continuing claims still remain historically low. As a result, a strong rally did not follow.
Nevertheless, if jobless claims continue to climb, the Fed will have to rethink its hawkish stance. As a result, a strong rally can be expected in the crypto market.
The United Nations and the World Bank have already blamed central banks for an impending recession in 2023. With the midterm elections quickly approaching, certain lawmakers are getting wary of the Fed’s stance. Democratic Senator from Massachusetts, Elizabeth Warren, grilled the Fed chair, Jerome Powell, over his hawkish stance. She believes that the Fed will not be able to curb inflation while raising unemployment.
What The Unemployment Numbers Tell About Recession
The spike in jobless claims will definitely increase re4cession fears. However, the labor market is still incredibly strong. The jobless claims usually reach 388K during past recessions.
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