• US job figures show 517,000 new jobs were created in January with an unemployment rate of 3.4%.
• Crypto markets reacted to the news and Bitcoin dropped to $23,370.
• Economists anticipate two or more Fed rate hikes as a result.
US Job Figures Push Unemployment Rate Down
February 3, 2023 saw the US Bureau of Labor Statistics (BLS) announce that 517,000 new jobs had been created in January. This number was higher than the anticipated 185,000 figure set by Wall Street economists and pushed the unemployment rate down to 3.4%. Employment growth was seen within sectors such as healthcare, leisure and hospitality and government jobs owing to university workers returning from a strike.
Average Hourly Earnings Fall
Alongside this news, average hourly earnings fell to 4.4% on a year-over-year comparison which is lower than December 2022’s recorded 4.6%. The chief economist at Fitch Ratings, Brian Coulton predicted only one Fed hike before these figures were released but now anticipates two or more rate hikes due to inflationary pressure caused by the strong job figures.
Market Reacts To News
The crypto and traditional markets had both rallied earlier this week following Jay Powell’s announcement of the beginning of their „disinflationary process“. However today’s NFP numbers have overturned expectations that the Fed may pause their rate hikes due to poor employment numbers causing Bitcoin prices to fall below $23,370.
Tough Economic Times Ahead
Despite these positive US job figures being announced there are still major concerns about tough economic times ahead for 2021 due to continuing uncertainty around future job prospects in America.
The January labor report was good news for American citizens although it has introduced some doubts into cryptocurrency and traditional markets about further expected Fed rate hikes later this year due to inflationary pressure caused by increased employment numbers in America. Despite these positive signs however tough economic times lie ahead as uncertainty remains around future job prospects across America in 2021.