Crypto News: Marketupdate October 2024
In October 2024, the U.S. economy displays a mix of strong employment figures and rising inflation, carrying significant implications for investors and policymakers. The month began with notable job growth of 254,000 new jobs in September, which lowered the unemployment rate to 4.1% and raised wages by 0.4%. However, this positive trend was followed by mixed signals, including an unexpected inflation increase to 2.4%. As the Federal Reserve prepares for potential rate cuts in the coming months, questions remain on how these economic indicators will shape their policy. This market update article highlights the key economic developments of October 2024, covering topics from employment and inflation to Microsoft’s consideration of investing in Bitcoin.
October 4: Strong Job Growth in the U.S. in September: Unemployment Falls and Wages Rise
In September, 254,000 new jobs were created in the United States, a significant increase from the 159,000 jobs in August and well above the expectation of 150,000. The unemployment rate fell to 4.1%, partly due to a 430,000 increase in household-level employment. Average hourly wages rose by 0.4% compared to the previous month and were 4% higher than a year ago, indicating wage strength.
VExpectations in the financial markets are that the Federal Reserve will lower interest rates by a quarter percentage point in both November and December, although Fed Chair Jerome Powell warned that annual job growth has somewhat cooled. (Source: CNBC)
October 9: Fed Minutes Show Intense Debate on the Size of Rate Cuts in September
The minutes from the Fed’s September meeting, which resulted in a half-percentage point rate cut, provide insight into the divisions among policymakers regarding this unexpected decision. While Fed Chair Jerome Powell indicated that there was “broad support” for the cut, Governor Michelle Bowman preferred a smaller reduction to better manage inflation risks. The document reveals that policymakers have differing views on future rate cuts, ranging from none to 0.75 percentage points by the end of the year.
Investors expect further interest rate cuts in November and December, especially following positive employment figures. The inflation report set to be released on Thursday will be crucial for the Fed’s next steps in this process. (Source: Bloomberg)
October 10: Inflation Rises to 2.4% in September, Unemployment Claims at Highest Level Since August 2023
In September, U.S. inflation unexpectedly rose by 2.4% year-over-year, while core inflation, excluding food and energy, was at 3.3%. These figures were slightly above expectations. A significant contributor to the increase was a 0.4% rise in food prices and a 0.2% increase in housing costs, which partially offset the decline in energy prices. At the same time, new claims for unemployment benefits surged to their highest level since August 2023, influenced in part by Hurricane Helene and a strike at Boeing. The Fed will take these figures into account in its considerations for rate cuts, with expectations for a further reduction in November. (Source: CNBC)
October 22: Microsoft to Buy Bitcoin? Shareholders to Vote in December
Microsoft will vote on December 10 on a proposal from the National Center for Public Policy Research (NCPPR) to invest in Bitcoin. The Microsoft board recommends that shareholders vote against the proposal, as the company is already evaluating a wide range of investable assets, including Bitcoin. While the NCPPR views Bitcoin as an excellent hedge against inflation, it also acknowledges the volatility of the cryptocurrency. Microsoft continues to monitor trends in the crypto market but emphasizes that stable investments are essential to their financial strategy. (Source: Crypto Insiders)
October 30: U.S. Consumers Keep Economy Steady Ahead of Elections
The U.S. economy grew by 2.8% in the third quarter, partly driven by a rise in consumer spending, which saw its fastest growth in a year and a half. This increase in spending was supported by a strong labor market and a rise in household wealth. Despite a wide range of challenges, consumers continue to spend. Inflation has also significantly decreased, with the price index showing an annual increase of 1.8%. This gives the Federal Reserve room to lower interest rates. However, economists are forecasting a moderate slowdown in growth, influenced by recent strikes and natural disasters. (Source: Reuters)
October 31: Key Fed Inflation Rate Rises to 2.1% in September, As Expected
According to a report from the U.S. Department of Commerce, the Personal Consumption Expenditures (PCE) price index rose by 0.2% in September, bringing the annual inflation rate to 2.1%, in line with Dow Jones expectations. Core inflation, excluding food and energy, increased by 0.3%, reaching a year-over-year rate of 2.7%. This indicates that inflation is moving closer to the Federal Reserve’s target, which has not been achieved since February 2021. The increase in inflation was primarily driven by higher prices for services, while prices for goods fell by 0.1%. Despite inflation concerns, income and spending remain stable; personal income rose by 0.3% and consumer spending increased by 0.5%. Additionally, the number of new claims for unemployment benefits fell to 216,000, lower than the forecast of 230,000. The Employment Cost Index rose by 0.8% in the third quarter, indicating a moderate increase in wages and benefits. (Source: CNBC)
Conclusion
The October 2024 market update reflects the dynamics of a U.S. economy adjusting to both growing employment and increasing inflationary pressures. While strong job growth and rising wages indicate positive economic developments, the rising inflation figures and the corresponding policy decisions from the Federal Reserve raise questions about the future direction of the economy. The outlook remains uncertain, with concerns about a moderate slowdown in growth due to recent strikes and natural disasters. It is clear that both consumers and investors must remain vigilant about these developments, as the economic environment is in a critical phase with important elections approaching.
