Bitcoin price plunges despite good U.S. jobs data in September

The price of bitcoin (BTC) is moving inversely to the latest U.S. jobs report, following data released by the Labor Department on Friday. As reported by CNBC, the number of jobs increased by 263,000, an impressive growth although it was below the Dow Jones estimate of 275,000.

One of the major strains on the U.S. economy since the COVID-19 pandemic era has been job cuts. Economic stress due to rising interest rates and reduced purchasing power has forced employers to reduce the number of workers they employ in their companies.

As a result, month-over-month job growth has been ranked as a crucial measure of growth and recovery in the economy. According to data released Friday, the unemployment rate is now pegged at 3.5 percent and the labor force participation rate has dropped to 62.3 percent. According to the figures, the U.S. labor force declined by 57,000 people.

“Depending on your perspective on optimism or 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 jobs data prompted plenty of market reaction, with stock futures plunging lower and government bond yields charting a new path of growth. Bitcoin moved in tandem with stock futures and fell 1.57 percent to below $19,638.43.

The latest jobs numbers will serve as the basis for another 75 basis point interest rate hike by the Federal Reserve Open Market Committee (FOMC).

“This puts the nail in the coffin of another 75 percent increase [points de base] of rates in November” said Jeffrey Roach, chief economist at LPL Financial. One basis point is equal to 0.01 percentage point.

Employment data by the numbers

According to published data, there has been a mixture of growth and collapse in the job market depending on the data from different sectors of the economy.

The leisure and hospitality sector experienced the most growth with a total of 83,000 additional jobs. The health sector added 60,000 jobs, while the business services segment saw an increase of 46,000 jobs and the manufacturing sector added 22,000 jobs. While wholesale trade contributed 11,000 jobs, government jobs reduced the total quota by 25,000.

The collapse of government-created jobs is the reason the employment data fell short of expected estimates.

With more interest rate hikes still looming before the end of the year and other significant economic headwinds, the Federal Reserve will continue to use total job gains as a yardstick to measure the impact of its policies. Overall, the goal will be to keep unemployment around the 4 to 4.4 percent level in the near term.