U.S. stocks plunge, unemployment soars, recession fears intensify

The sharp decline in the US stock market and the record high unemployment rate have raised concerns about an economic recession: the US job market has significantly cooled down

The latest report from Zhitong Finance APP pointed out that the global financial market suffered a heavy blow on Friday, with the three major US indices significantly falling. Among them, the Dow Jones Industrial Average plummeted more than 600 points, and the Nasdaq fell into a technical correction zone. At the macroeconomic level, the weakness of the US job market exceeded market expectations, with the unemployment rate rising to 4.3%, a new high in nearly three years. This data has intensified market concerns about the risk of economic recession.

Specifically, data released by the US Bureau of Labor Statistics on Friday showed a significant slowdown in non farm employment growth in July, with only 114000 people added, far below market expectations. At the same time, the unemployment rate unexpectedly rose to 4.3%, marking the first consecutive four month increase since October 2021 and reaching a critical level warning that the economy may enter a recession. In addition, the growth of average hourly wage also showed signs of slowing down, with a month on month increase of 0.2% in July. Although the growth trend continued, the year-on-year increase in the past 12 months slipped to 3.6%, the lowest since May 2021, further confirming the trend of weakened wage growth momentum.

This series of data not only reflects a significant slowdown in the growth rate of the US job market, but also suggests that the labor market may enter a cooling cycle faster than previously estimated, casting a shadow over the outlook for the US economy.