Unemployment At 4.1% Confirms Powell's "Growing Confidence" In The U.S. Economy

Defying fears of a slowdown, the unemployment rate in the United States fell from 4.2%  to 4.1% in September.

Nonfarm payrolls increased by 254,000 last month, and job gains increased the most in six months, with average hourly earnings rising 0.4% - a 4% year-on-year increase. 

The highly anticipated report on the labor market published on Friday by the Bureau of Labor Statistics showed that the economy is in much better conditions than economists predicted. 

Forecasts for September data expected a 4.2% to 4.3% unemployment rate and an increase in nonfarm payroll employment of about 150,000.

Jonathan Millar, a senior economist at Barclays, said: "Today's report reinforces the broad resilience theme for the U.S. economy, pushing aside concerns of an imminent deterioration in labor market conditions."

In August, the unemployment rate was 4.2%, reversing an increase to 4.3% registered in the previous month. 

Inflation, interest rates, and unemployment levels are the most telling macroeconomic factors affecting an economy's well-being.

On September 18, the United States Federal Reserve Bank announced the first federal fund rate cut in over a year. This policy change reflected the annual inflation level coming down to 2.5% from 2.9% in July and even higher levels in the months prior. 

Investors took the 50 basis point cut with caution—while it stimulates investment, it can also signal that the economy is cooling down. Now, with unemployment levels confirming the resilience of the North American economy, investors can relax. 

Other Factors At Play

While the macroeconomic data from the world's largest economy plays a significant role in influencing the prices of cryptocurrencies and traditional assets, the escalating crisis in the Middle East has been the key price determinant during this week. 

Following Israel's launch of a ground invasion in southern Lebanon on Monday and Iran's Tuesday night missile attack on Israel, crypto prices have been in the red. 

Bitcoin's price, aided by Powell's rate cut, was on its way to breaking the $65,000 resistance level, but it fell to almost $60,000. Ether and other altcoins followed the same downward trajectory as investors rushed to move their money toward less risky assets. 

De-escalating the regional conflict between the oil-producing nations in the short term is crucial to avoid an oil price jump. Failure to do so could potentially trigger an inflation shock that worsens economic and financial conditions worldwide.