August unemployment fell to under 10% for the first time since the spike at the beginning of the COVID crisis.
The current rate of 8.4% could be a signal that the economic recovery is well on its way.
The Labor Department statistics exceeded market expectations, which hovered at just under 10%. Stock markets initially responded positively but later retreated.
The Dow Jones, S&P 500, and Nasdaq all saw losses as Sept. 4th’s trading closed lower overall. Banks and travel closed broadly higher, while tech stocks saw declines after weeks of gains.
Recovery in the works
The labor numbers have been hailed by many as a sign of the strength of the recovery after the COVID crisis. Indeed, the first sign of the crisis was the massive spike in unemployment, which has inched lower ever since.
However, the jobs growth was largely in the government sector, totaling 344,000 or 25% of month’s gains. Of that number, 328,000 were related to the census and are not likely long term positions.
Nevertheless, other sectors also added jobs, with increases in retail, local government, and professional and business services. The number of furloughed employees also declined substantially.
Bitcoin declined in correspondence with the labor numbers, which could indicate that it has taken on a reputation as a hedge against inflation. With the economy apparently recovering based on employment data, the demand for safe-haven assets may have declined.
Bitcoin has been considered a risky asset, much like stocks. However, recent trading has revealed that bitcoin is functioning like gold and other hedges, working in reverse correlation to economic news.