Bitcoin, Ether Trade Marginally Lower Following Release of Discouraging Jobs Data
A persistently robust employment market has played a major role in capping asset prices, though a floor seems intact as well.
BTC was changing hands at about $23,400, down slightly but roughly in the middle of its range over the last week. ETH also remained squarely rangebound.
Initial jobless claims decreased by 2,000 from a week prior to 190,000, falling below expectations of 195,000. The week-over-week decline offers the latest evidence of a job market that remains exceedingly tight, leaving it more likely to put upward pressure on prices.
To be sure, forecasts can be overly optimistic or pessimistic for a number of reasons, but jobless data from recent weeks has been moving in the opposite direction of what the U.S. Federal Rewerve’s Federal Open Market Committee (FOMC) is seeking.
The FOMC has implied that initial jobless claims must increase to relieve inflationary pressures, but jobless claims have not risen since Feb 5. However, the four-week average of initial jobless claims has moved higher, to 193,000 from 191,250 in the prior week. Fed Chair Jerome Powell and various governors have noted their concerns about the stubbornly robust employment market on multiple occasions.
The U.S. labor force participation rate of 62.4 (62.4%) remains below pre-pandemic levels, while “U-6” unemployment rate, which accounts for part-time and marginally employed individuals, is 6.6%, holding relatively stable since June 2022.
FOMC will be hoping the U.S. Labor Department’s release of updated labor force participation and U6 unemployment on March 10 will show a decline in the former and increase in the latter. Even minimally, more promising trends for each would likely allow the Fed to scale back its recent diet of hawkish interest rate hikes, which, based on recent history, would please crypto investors. Markets over the past 15 months have tended to fall amid discouraging jobs and price indicators but risen on upbeat news.
Ether’s price sank during the hour of the jobs data release, while bitcoin’s price moved higher. (Both traded lower before reversing course as the day evolved.)
ETH’s initial price decline appears to have been a reaction to economic data, while BTC’s push higher was likely buttressed by the emergence of Bitcoin ordinals, a protocol that allows for the creation of non-fungible tokens (NFT) on the Bitcoin blockchain.
Still, crypto markets continued the recent theme of being relatively disconnected from traditional markets as major indexes were recently ticking upward. Crypto correlations with equities as well as the dollar index remain loose.
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