Monday, June 10, 2024

conflicting employment data, Coinbase wallet and identity

“Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones.” – Bertrand Russell  ||  

Hello everyone! I hope you all had a great weekend. I was in Edinburgh, where the weather was uncharacteristically lovely, the scenery characteristically atmospheric, and the entire experience uplifting as always.

Today’s newsletter is being sent out really early since I’m en route to Warsaw today for a post-trade conference and I don’t trust airport wifi. Because of said conference, I have to miss publication tomorrow and Wednesday.

If you find this newsletter useful, would you mind sharing it with your friends and colleagues? ❤

IN THIS NEWSLETTER:

• Conflicting jobs data – does it matter?

• Coinbase smart wallets: a new type of identity?

If you’re not a subscriber to the premium daily, I hope you’ll consider becoming one! You’ll get ~daily insight into the growing overlap between the crypto and macro landscapes, as well as some useful links. And there’s a free trial!

WHAT I’M WATCHING:

Conflicting jobs data – does it matter?

By now you’ve probably seen that the US non-farm payrolls increase came in much hotter than forecast, with a gain in May of 272,000 vs 182,000 expected and a downwardly revised 165,000 in April. That does not sound like a slowing market.

On the other hand, the unemployment rate ticked up to 4.0%, ending the longest period (27 months!) of sub-4.0% unemployment since the 1960s, and reaching the highest unemployment rate since April 2022.

What’s more, the rate of increase in the unemployment rate is starting to accelerate, which is usually not a good sign.

(chart via the St. Louis Fed)

According to the responses, the number of employed people dropped by 408,000, which would have delivered an even higher increase in the unemployment rate were it not for an unexpected drop in the size of the active labour force.

How is this possible? How can employment and unemployment go up at the same time?