By George Ward
The Dec. 2022 US Nonfarm Payrolls Report showed weak pay growth. Hence, it is unlikely to impede interest rate rises in the immediate term. Therefore, it is no surprise that BTC recovered from a negative run in the previous 24 hours but has remained unchanged.
After fluctuating between $16,500 and $17,500 for the better part of last month, BTC broke out of these rangebound zones following the release of the jobs report. However, the surge was temporary, as the leading digital asset now trades at $17,347 at the time of writing.
Furthermore, the Nasdaq gained 1% in premarket trade, while the Dow Jones Industrial surged 370 points following the report’s release. Also, the S&P 500 increased by 1.1%.
Strong Job Growth, Weak Earnings
According to the US Nonfarm Payrolls report, 223,000 jobs were added in December 2022, up from the 203,000 projection but fewer than the 263,000 added in November 2022. The unemployment rate decreased from the previously reported 3.6% in November 2022 to 3.5% in December 2022, exceeding the 3.7% projection.
A lower unemployment rate indicates a balance between the demand and supply of jobs. It should be good news for the Federal Reserve as average hourly earnings came in at 0.3%, 0.1% below experts’ expectations of 0.4%, since slower wage growth supports their tightening theory.
Additionally, hourly wages increased by 4.6% from a year earlier. With 67,000 new positions in leisure and hospitality, services’ salaries increased faster than goods’ salaries for December 2022.
With 62.3% more individuals seeking employment than before, pay growth is under little less pressure. The US Bureau of Labor Statistics (BLS) issues its employment report every month on the first Friday.
Fed’s Message Not Expected To Change
According to Wells Fargo’s Michael Schumacher, the Federal Reserve is unlikely to change interest rate hikes at its upcoming Open Markets Committee meeting, despite the slower wage growth and reduced unemployment.
The Fed raised interest rates by 0.75% four times in 2022 alone as inflation soared with poor employment data. However, in December 2022, it lowered its rates to 50 basis points.
Meanwhile, prices of most cryptocurrencies have mirrored the response of risk assets to macroeconomic reports throughout 2022. Positive news on US crypto regulation and the approval of a spot ETF by US regulators are two factors that might cause cryptocurrency prices to resume their bull run.