US Unemployment Rate

Here is a chart I compose using Excel:

The bar in red shows the key data announced last night in the US.

What does it mean?

US has the largest consumer base in the world. If the unemployment rate remains at 10%, it is not going to help the global economy. There are a lots of people in China and India but their consumption cannot compare to the US.

The good thing is that the earth is "greener" if global consumption goes down. But the world population is increasing at a fast pace.

How does it impact the stock market? We first need to look at USD. DXY dropped 0.5% which is pretty huge for one day. The US Fed may not raise interest rate that quick although it has informed banks that it is imminent.

USD has a very close relation with the US unemployment rate. Since US is having a consistent unemployment rate of 10% for two consecutive months, I expect the USD will go sideway.

If USD goes sideway, so is the stock market. But the world was expecting a better a better employment picture in the US. Those who had high hope may start to reduce their position in the stock market as well as USD.

Have a nice weekend!