By Sean Yoo

On October 5, the U.S. Bureau of Labor Statistics reported that the U.S. economy added a staggering 254,000 jobs and the unemployment rate fell to 4.1 percent.

When the Feds cut interest rates by an astounding half a point last month, concerns arose about the direction of our economy. However, some economists assured the people by calling this an insurance cut. 

Federal Reserve cuts interest rates, borrowing is cheaper for businesses and consumers. This action encourages spending, investing, and more to boost economic activity. However, when such a huge percentage lowers these interest rates, it could mean that a recession is coming and raises concerns, especially without the job reports and/or the GDP growth. 

“Our decision to reduce our policy rate by 50 basis points reflects our growing confidence that, with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate economic growth and inflation moving sustainably down to two percent,” Central Bank’s leader, Jerome Powell said in a news conference following the rate cut. 

The strength of the labor market was evident in the September job report. This report eased concerns about the current state of the economy and boosted optimism that the U.S. Economy is heading towards a scenario of inflation coming down without a recession. It surpassed forecasts and was the strongest monthly gain in employment since March of this year.

This reassurance that inflation would decrease without a recession led to the Dow closing at a record high on Friday, October 4. The market ended with the Dow rising 341 points or 0.8 percent, the S&P 500 gaining 0.9 percent, and the NASDAQ composite adding 1.2 percent. All three major indexes ended the week higher.

The positive market performance was particularly good news for the students at Granada Hills Charter, where interest in the stock market has been growing. Students have been keenly following economic developments, learning how events like the September job report influence stock prices and market trends.

For many of these students, platforms like Robinhood have opened up new investment opportunities. These platforms enable students to buy fractional shares, allowing them to participate in the stock market without needing large amounts of capital. This accessibility has made investing more appealing to younger generations, allowing them to learn firsthand how economic events—such as job reports, Fed decisions, and inflationary trends—affect market dynamics.

“The market outlook looks good so far. The Federal Reserve has reduced inflation through higher interest rates without triggering a recession. Thankfully, the federal reserve is now starting to ease off the gas, and even reverse the interest rate hikes due to inflation slowing down massively,” junior Christopher Bonilla said. 

For these students, investing and understanding the economy is more than just a hobby; it’s a life skill they will continue to use for the rest of their lives. This educational experience will allow students to learn how the economy works in real-time and what factors influence them. This September job report serves as a case study of the relationship between the labor market and market reactions. 

As these students build more experiences, they gain valuable knowledge that will help them in the near future. Whether they pursue careers in finance, economics, law, or other fields, their ability to understand the impacts and importance of these actions will allow them to flourish economically.