• The U.S Bureau of Labor Statistics (BLS) reported 517,000 new jobs in January and a drop in the unemployment rate to 3.4%.
• This news caused Bitcoin to fall to $23,370 and economists anticipate 2 or more Fed rate hikes due to inflationary pressures.
• Crypto and traditional markets had rallyied earlier in the week after Jay Powell’s post-FOMC announcement of disinflationary trends.
US Jobs Boom Affects Bitcoin Price
The U.S Bureau of Labor Statistics (BLS) recently released news that 517,000 new jobs were created in January, pushing the unemployment rate down to 3.4%. This impressive figure exceeded Wall Street economists‘ expectations of 185,000 jobs for the month. Such job growth was led by sectors such as health care, professional and business services, leisure and hospitality, and government.
Impact on Bitcoin
The strong job numbers immediately caused Bitcoin prices to fall to $23,370 shortly after the news was announced. Chief economist at Fitch Ratings Brian Coulton noted that the market previously expected only one Fed hike before these positive NFP numbers but he now anticipates two or more rate hikes due to inflationary pressures.
Prior to this announcement both crypto and traditional markets had rallied earlier this week following Federal Reserve Chairman Jay Powell’s post-FOMC statement about beginning a „disinflationary process“. However, today’s NFP numbers have dashed hopes that the Fed might delay any further rate hikes due to poor employment data.
Average Hourly Earnings
Alongside this report was also a decrease in average hourly earnings which fell from 4.6% year-on-year comparison recorded in December 2022 down to 4.4%.
Despite initial optimism surrounding disinflationary trends it appears that economic times ahead are still uncertain with an increase in inflationary pressures leading many analysts predicting two or more rate hikes from the Federal Reserve .