Bitcoin Reaches $20,000 Threshold Again Despite Higher Than Expected US Unemployment Rate
On March 10th, the US Bureau of Labor Statistics released the unemployment rate for February, which stood at 3.6%. This figure is slightly higher than the predicted rate of 3.4%, representing a 0.2% increase from January.
This news has had a positive effect on the cryptocurrency market, with Bitcoin hitting the $20,000 mark once again. In contrast, the US dollar index has dipped by 0.3% in just five minutes and currently sits at 104.8 points.
However, despite the slight uptick in the unemployment rate, the US economy added 311,000 jobs in February, surpassing the estimated 224,000 jobs. In total, the US created 517,000 jobs in February, which is slower compared to December 2020 but still positive news for the economy. Moreover, the average hourly wage for workers rose by 0.2% in February, which is lower than the previously predicted 0.1%.
These economic indicators come amid statements by the Federal Reserve Chairman, Jerome Powell, on March 7th. Powell warned that the consumer price index (CPI) for February could indicate that inflation is returning to the US economy. As a result, the interest rate hike could be higher than previously estimated.
Powell acknowledged that inflation has been under control since mid-2022, but it is still much higher than the long-term target of 2%. In January, the annual personal consumption expenditure (PCE) price index fell to 5.4% from its highest point of 7% in June 2022. The core PCE price index (which excludes food and energy prices) has risen by 4.7% over the past twelve months.
Despite the strong labor market, the inflation rate still remains higher than the Federal Reserve’s 2% target. Powell has indicated that the Fed will continue to tighten its monetary policy, and they will also continue the significant reduction of the balance sheet size.
In conclusion, the US economy is showing signs of recovery with the increase in jobs and hourly wages. However, inflation remains a concern for the Federal Reserve, and they will continue to monitor economic indicators closely to make informed policy decisions.
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