You are correct that the market tends to celebrate when the unemployment rate goes up, which is counterintuitive. The reason behind this is that the market is forward-looking and anticipates future events. When the unemployment rate goes up, it signals that the Federal Reserve will likely lower interest rates in order to stimulate the economy and create jobs 1. Lower interest rates make it easier for businesses to borrow money, which can lead to increased investment and job creation 1. This is why the market tends to celebrate when the unemployment rate goes up.However, as you pointed out, if unemployment goes up in the current environment, it could also signal a possible recession is coming, which would cause a downward correction in the market 1. The market’s reaction to changes in employment rates is not always straightforward and can be influenced by many factors.I hope this helps clarify why the market tends to celebrate when the unemployment rate goes up.
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It is better to ask ChatGPT, and above is the answer.
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