Job growth continued in March as the U.S. unemployment rate dropped toward pre-pandemic levels, further tightening the labor market at a time when inflation is already running at its hottest pace in four decades.
The unemployment rate declined by 0.2 percentage point to 3.6% in March, and the number of unemployed decreased by 318,000 to 6 million.
The widely watched nonfarm payrolls report, released Friday by the Labor Department’s Bureau of Labor Statistics, showed that employers added 431,000 jobs in March, missing economists' estimates for a gain of 490,000. The economy added 678,000 jobs in February.
The jobs report is a widely watched indicator for both traditional and crypto traders because a tighter-than-expected labor market could push the Federal Reserve to act more aggressively in raising interest rates.
"Notable job gains continued in leisure and hospitality, professional and business services, retail trade, and manufacturing," the report stated.
The U.S. economy is still scrambling with a labor shortage as a result of the pandemic, which left 10.9 million jobs vacant at the end of 2021. But the employment situation summary signals a strong recovery from pandemic levels as the labor market continues to add jobs. Just before COVID-19 hit, the unemployment rate stood at 3.5%, only slightly lower than the March rate.
Some traders hold bitcoin as a protection against inflation, while others say that the cryptocurrency hasn't yet shown that there is a linkage between the two.
The jobs report "shouldn't have much bearing on the crypto market," Scott Bauer, a former Goldman Sachs trader who's now CEO of Prosper Trading Academy, said. “The correlation between inflation and crypto values has still not been proven in my opinion.”
Bitcoin rose 1% in the minutes following the report to about $45,400, but was still down 4.7% over the past 24 hours.
The nonfarm payrolls report serves as a key indicator of the economy's health. It typically comes out on the first Friday of every month, making it the first major data point on the monthly reporting calendar.
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