According to recent figures, the US added 467,000 new jobs in January alone, despite concerns that the Omicron virus is leaving many companies understaffed.
At the time of the news broke, Bitcoin was trading under the $40K level.
The labor market in the United States of America:
The latest employment numbers were released in a report released by the US Department of Labor’s Bureau of Labor Statistics earlier yesterday.
While total non-farm employment increased by more than 400,000 jobs, the unemployment rate rose only slightly from 3.9% to 4%.
In comparison, the unemployment rate decreased by 2.4 percentage points compared to the same period last year.
It is also only 0.5% higher than the 3.5% unemployment rate since February 2020 before the pandemic began.
The job recovery last month largely exceeded economists’ expectations, expecting only 150,000 new jobs, according to a Dow Jones survey.
The job recovery is said to have been strong in hospitality, professional and commercial services, retail, warehousing and transportation.
The length of time during which people are unemployed has also decreased, as stated in the report:
In January, the number of people unemployed under 5 weeks rose to 2.4 million and represented 37.0 per cent of the total unemployed.
While we reduce the number of long-term unemployed (those who have been out of work for 27 weeks or more) to 1.7 million.
Currently the Federal Reserve has two formal mandates:
Low unemployment, low inflation.
With the unemployment problem emerging less urgently, the Fed may be more motivated to address inflation concerns.
In December, CPI inflation reached 7% which has not been recorded in 40 years.
What is the potential impact on Bitcoin?
In order for the Fed to tackle inflation, it plans to raise interest rates in March.
This policy – or even its anticipation – is known to negatively affect both stocks and cryptocurrencies alike.
As money becomes more expensive to borrow, it becomes difficult to invest in real estate, stocks or any other risky assets such as cryptocurrencies.
As such, funds tend to be withdrawn from the market at these times.
After yesterday’s unemployment numbers came out, bitcoin fell by 1% to around $37,500.
It has since risen above $41,400 in a matter of hours, its highest level in two weeks.
Manchester United signs £20m deal with blockchain platform Tezos
Bitcoin regains the level of 40 thousand dollars and revives with it alternative digital currencies