Tough economic times ahead are still a major concern despite the U.S. breaching its target number of new jobs. 517,000 new jobs were created in January, pushing the unemployment rate to 3.4%. Bitcoin fell to $23,370 shortly after the news was announced.
517K+ jobs were created in January against 185K expected
Published by the U.S. Bureau of Labor Statistics (BLS), the January labor report indicates that the non-farm payrolls increased by 517,000 in January. The figure surpassed the 185,000 anticipated by Wall Street economists.
As a result, the unemployment rate fell to 3.4% versus the expected 3.6%. The rise was higher than the 2022 monthly average of 401,000 jobs. These gains were led by employment growth in health care, professional and business services, leisure and hospitality, and government.
Government job growth reflected university workers’ return from a strike. The average hourly earnings parameter fell to 4.4% on a year-over-year comparison. This is lower than the 4.6% recorded in December 2022.
Fed hawkish on the data
The chief economist at Fitch Ratings, Brian Coulton, said he expected only one Fed hike before the positive NFP numbers. However, he now anticipates another two or more rate hikes. With that, he said that the Fed has “quite a lot of work” to embark on to tame inflation.
Coulton added that even though the market had shown some confidence in fighting the Fed earlier this week, these numbers have introduced doubts. Both the crypto and traditional markets had rallied earlier this week following the post-FOMC announcement by the Fed chairman, Jay Powell, that the “disinflationary process” had begun.
However, today’s NFP numbers have destroyed the hopes of traditional and crypto traders who expected that the Fed might pause the rate hikes due to poor employment numbers.