According to recent figures, the U.S. added 467,000 new jobs in January alone, despite concerns that Omicron may be understaffed by several companies. Bitcoin traded slightly lower after the disclosure. A surprisingly strong job market Recent employment figures were published earlier today in a report from the US Labor Department’s Bureau of Labor Statistics. While total employment outside the agricultural sector grew by more than 400,000 jobs, the unemployment rate rose only slightly from 3.9% to 4%. By comparison, unemployment is 2.4 percentage points lower than at this time last year. It’s also just 0.5% above the 3.5% unemployment rate of February 2020 — before the pandemic started. The job recovery last month far exceeded economists’ expectations, who forecast just 150,000 new jobs, according to a Dow Jones survey. The recovery has reportedly been strongest in the hospitality, professional and business services, retail and warehousing/transportation sectors. The length of time that people are unemployed is also decreasing: “In January, the number of people unemployed for less than 5 weeks rose to 2.4 million, accounting for 37.0 percent of the total unemployed,” the report says. “The number of long-term unemployed (those who have been unemployed for 27 weeks or more) fell to 1.7 million.” The Federal Reserve has two official mandates: low unemployment and low inflation. With unemployment appearing to be a less urgent issue, the Fed may be further motivated to address inflationary concerns. In December, CPI inflation reached a nearly 40-year level of 7%. Impact on Bitcoin? To tackle inflation, the Fed plans to raise interest rates in March. However, such a policy – or even the expectation of it – is known to negatively impact both stocks and crypto. When money becomes more expensive to borrow, companies are no longer free to invest in real estate, stocks or particularly risky assets like crypto. As such, money tends to pull back from the markets at these times. After today’s unemployment figures, Bitcoin fell 1% to around $37,500. Since then, however, it has surged above $40,300 in a matter of hours — a high it hasn’t seen in about two weeks.
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