• The US Labor Market Report released on Friday reported a much higher than expected job gain of 517,000 last month along with a record low unemployment rate.
• This report has raised hopes that the Federal Reserve will be able to achieve its desired “soft landing” where it tightens policy enough to bring down inflation without causing a recession.
• Despite this news, Bitcoin prices were unable to sustain any rally and are currently down on the day.
US Labor Market Report
The US Bureau of Labor Statistics recently released its labor market report for last month, which showed an impressive increase in job gains compared to expectations. The economy added 517,000 jobs last month, way above the expected 190,000 figure while December’s figure saw an upwards revision of 30,000 to 260,000. The household survey also showed that the unemployment rate has dropped to a more than five-decade low at 3.4%, despite an increase in the participation rate. Average hourly earnings continued to grow at a solid YoY pace of 4.4%, slightly above expectations.
Optimism for Fed Achieving Soft Landing
This report beat economist expectations across the board and experts commented that it casts serious doubts about the possibility of the economy slipping into recession and triggers optimism for the Fed achieving its desired “soft landing”. Analysts believe this increases the chance that policy can be tightened sufficiently enough to bring down inflation without provoking a widespread job loss recession.
Bitcoin Prices Unable To Sustain Rally
Despite traders initially sending risk assets like US stocks lower upon receiving this news, they soon came in to support them again due to their optimism towards the Federal Reserve being able reach its soft landing goal. Unfortunately however, Bitcoin was not able to sustain any rally as prices swung between losses and gains of about 1%. It is currently down on the day with many traders speculating further downside ahead if previous highs are not broken soon.
Gold Prices Also Pulling Back
Gold prices have also been affected by this news as they have pulled back nearly 5% from their multi-month highs at $1960 just one day ago – now standing around 2.5% lower on the day as well.
On-Chain Metrics Still Bullish
Despite these short-term dips in price action for both Bitcoin and gold, analysts remain bullish on both assets with many expecting Bitcoin’s target price of $25k still within reach due mainly due favorable long term metrics such as accumulation rates and mining difficulty adjustments which still scream bull market Bitcoin .