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Why can an employment report make the global market hold its breath?
The non-farm payroll report is like a "check-up report" on the U.S. economy. The number of jobs is the "pulse," the unemployment rate is the "blood pressure," and wage growth is the "temperature" (reflecting inflation pressure).
Why can it "command" the global market?
The reason why the non-farm payroll report has such a huge impact lies in the fact that it directly answers two questions that the most powerful financial institution in the world - the Federal Reserve (The Fed) - is most concerned about.
The monetary policy of the Federal Reserve has two statutory goals (Dual Mandate): "to promote maximum employment" and "to stabilize prices." The non-farm payroll report perfectly corresponds to these two goals: "non-farm employment numbers" and "unemployment rate" directly measure the achievement of the "employment" goal. "Average hourly wage" directly indicates the future trend of "prices" (inflation).
This forms a crucial logical chain: the performance of non-farm data → influences the Federal Reserve's judgment on the economy and inflation → determines whether the Federal Reserve's next step is to "raise interest rates" or "lower interest rates" → the Federal Reserve's interest rate decision determines the "cost" and "flow" of all global funds → ultimately affects the prices of global stock markets, bond markets, foreign exchange markets, cryptocurrency markets, and commodities.