- The US will publish the latest non-farm payrolls (NFP) data on Friday.
- These numbers will have an impact on Bitcoin and cryptocurrency prices.
- Strong jobs numbers will push the Fed to hike by 0.50% in March.
The US Bureau of Labor Statistics (BLS) will publish February’s non-farm payrolls (NFP) report on Friday. These numbers, which are highly anticipated, will have an immediate impact on Bitcoin and other crypto prices. They will also impact the performance of American indices like the Nasdaq 100 and S&P 500.
NFP report preview
The American economy is doing relatively well, based on numbers published in February and this month. At the time, the data showed that the economy added more than 517k jobs in January while the unemployment rate plunged to a five-decade low of 3.4%. Wages remained at an elevated level as well.
Further data showed that America’s retail sales jumped sharply while consumer confidence also did well. Therefore, the upcoming NFP data will have an impact on Bitcoin and other crypto prices. Economists polled by Reuters believe that the economy added more than 217k jobs in February while the unemployment rate remained at 3.4%.
There is a likelihood that these numbers will be better than expected once again. For one, data released by ADP on Wednesday revealed that private payrolls jumped by over 220k in February. Additional data showed that America had over 10 million vacancies in January.
Therefore, if the numbers are better than expected, they will signal that the economy was doing well. They will also send signal that the actions of the Fed were having a limited impact on slowing the economy down.
Read more: How to buy Bitcoin.
Impact on Bitcoin and crypto prices
These numbers will have an impact on Bitcoin prices for several reasons. First, they will come a few days after Jerome Powell, the Fed Chair, warned that the bank will need to continue hiking interest rates in the coming months. Precisely, he warned that the Fed will likely hike rates above where the market was expecting.
In his second day of testimony, Powell slightly walked back those claims and maintained that the Fed will be data-dependent. One of the top data that the bank will watch will be on employment. In his statement in February, Powell said that the biggest risk in the bank’s inflation fight was the fact that the unemployment rate was so low.
In economics, the relationship between jobs and inflation is known as Philip’s curve. It simply states that inflation will tend to rise when the unemployment rate is low. Therefore, if the jobs are strong, we could see the Fed maintain an extremely hawkish tone later this month.
After the non-farm payroll (NFP) data, focus will be on the upcoming US inflation numbers scheduled for Tuesday. My crystal ball tells me that inflation will be much higher than expected, which will push the Fed to continue tightening.
The impact of the NFP data and inflation numbers on Bitcoin price will be dire. If they are both strong, we could see Bitcoin price crash below $18,000 in the coming months. That’s because higher rates will see more investors move to cash and government bonds.
