The Lesson from Rising Unemployment Rates: Historical Data Reveals the True Relationship Between Economic Cycles and Markets

【BlockBeats】Recently, a set of unemployment data has attracted attention. The December US non-farm payroll report shows that the unemployment rate in November has risen from 4% at the beginning of this year to 4.6%. This level of increase is indeed not a good sign, but looking back at historical records, it’s not particularly rare.

The Wall Street Journal compiled data since 1953 and found that six U.S. presidents experienced rising unemployment rates early in their terms — Trump is the latest member on this list:

Eisenhower’s rate rose from 2.9% to 3.5% Nixon’s from 3.4% to 3.5% Ford’s from 5.5% to 8.8% Reagan’s from 7.5% to 8.3% Bush Jr.’s from 4.2% to 5.5% Obama’s from 7.8% to 9.9%

Here’s the interesting part: except for Bush Jr., the political parties of the other five presidents all lost at least 12 House seats in subsequent midterm elections. Obama’s loss was the worst; he himself admitted it, losing 63 seats in 2010. Bush Jr. managed to hold onto his seat mainly because of 9/11, which shifted the focus of the midterm elections from the economy to national security.

But here’s an interesting contrast: during the first ten months of Trump’s first term, the unemployment rate actually decreased from 4.7% to 4.2%, showing clear improvement. What was the result? In the 2018 midterm elections, the Democrats still gained 41 seats.

This illustrates a key point — changes in the unemployment rate and election outcomes are not necessarily simple cause-and-effect. Economic data is certainly important, but soft factors like public opinion, event shocks, and voter sentiment can also influence political trajectories. For the crypto market, understanding this complexity is crucial: macroeconomic data can affect capital flows and investor expectations, but it is never the sole determining factor.