By
Temitope Olatunji
April 26th, 2024
Per the data published, there was a mix of growth and slumps in the job market per data from different sectors of the economy.
The price of Bitcoin (BTC) is moving inversely to the latest job report from the United States following the data released by the Labor Department on Friday. As reported by CNBC, the nonfarm payroll increased by 263,000, an impressive growth despite slipping from the Dow Jones estimate of 275,000.
One major strain that the United States economy has experienced since the COVID-19 pandemic era has been manifested through job cuts. The strain in the economy per rising interest rates and reducing purchasing power has forced employers to scale back on the number of workers they utilize in their businesses.
As a result, job growth month-on-month has been classified as one crucial metric to measure the growth and recovery of the economy. Per the data shared on Friday, the unemployment rate is now pegged at 3.5% with the labor force participation rate slumping to 62.3% overall. By the numbers the US labor force shrunk by 57,000.
“Depending on your view of optimism vs. pessimism, on the economy, there’s a little bit of something for everyone in this report,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Obviously, the market is not happy, but the market is not happy in general these days.”
The job data has stirred a lot of market reactions with stock futures plunging lower and government bond yields charting a new growth course. Bitcoin moved in tandem with the stock futures and dropped by 1.57% to below $19,638.43.
The latest job numbers will be used as a basis for another 75 basis points interest rate hike by the US Federal Reserve Open Market Committee (FOMC).
“This puts the nail in the coffin for another 75 [basis point rate increase] in November,” said Jeffrey Roach, chief economist at LPL Financial. A basis point is 0.01 percentage point.
Job Data by the Numbers
Per the data published, there was a mix of growth and slumps in the job market per data from different sectors of the economy.
The leisure and hospitality segment saw the biggest growth with a total of 83,000 jobs added. The healthcare sector added 60,000 jobs while the business services segment shot up by 46,000 with manufacturing churning up a total of 22,000 jobs. While wholesale trade contributed 11,000 jobs, government jobs cut the total quota by 25,000.
The slump in jobs added by the government has been nipped as the reason for the job data not actually hitting the projected estimates.
With more interest rate hikes still imminent before the end of the year amidst other major economic headwinds, the Feds will keep using the gains in total jobs as a yardstick to measure the impact of its policies. Overall, the target will be to keep unemployment around the 4 to 4.4% level in the short term.