Bitcoin hovers around $20,000 as U.S. unemployment rises higher than expected

On March 10, the U.S. Bureau of Labor Statistics announced that the unemployment rate in February was 3.6%. That was slightly higher than the 3.4% expected and up 0.2% from January.

The news failed to do much to support the recovery of the cryptocurrency market. While bitcoin edged up to $20,000 after hitting lows around $19,600, it was still down more than 8% on the day. Ethereum also fell around 8%, hitting a low of $1,387 before recovering to the $1,400 region.

Source: TradingView

Meanwhile, the U.S. dollar index fell 0.3% in just five minutes and is currently trading at 104.8.

However, the US economy added 311,000 jobs in February, beating estimates for 224,000 jobs, despite a slight increase in the unemployment rate. Overall, the U.S. created 517,000 jobs in February, a slower pace than December 2020 but still positive news for the economy. In addition, average hourly earnings for workers rose 0.2% in February, below the previous forecast of 0.1%.

The economic indicators came after Federal Reserve Chairman Jerome Powell said on March 7 that the consumer price index (CPI) for February may indicate that inflation is rising. As a result, rate hikes could be higher than previously estimated.

Powell acknowledged that inflation has been contained since mid-2022, but remains well above the long-term 2% target. In January, the annual personal consumption consumption (PCE) index fell to 5.4% from a peak of 7% in June 2022. Core PCE, which excludes food and energy prices, has increased 4.7% over the past 12 months.

Despite a strong labor market, inflation remains well above the Fed’s 2% target. Powell said the agency would continue to tighten monetary policy while also continuing to significantly reduce the size of its balance sheet.

In short, the U.S. economy is showing signs of recovery, with employment and hourly wages rising. However, inflation remains a concern for the Fed, which will continue to monitor economic indicators closely to make informed policy decisions.

  • BTC breaks key support, sending markets down across the board
  • BTC drops to $20K, should you buy the dip?

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