US Job Openings Fall – Bad News for Crypto?
There have been fewer job vacancies in the US recently, and this could somehow have an impact on Bitcoin and the broader crypto market.
The latest US unemployment data shows that the labor market remains predominantly strong at 3.8%.
However, the creation of new jobs has been seen to fall by as much as 6.4%; with social assistance and healthcare, which have very few vacancies so far.
Demand for labor is seen to reverse and has actually fallen to 1.9%.
On the other hand, the creation of new jobs in the US has been observed to increase last month by 209,000 as well as around 186,000 jobs created or an increase of 13%.
In addition, the annual wages of workers have also fallen by 7.8% for those who stayed in their current jobs, while the wages of those changing jobs increased by a whopping 15.8%.
With this development, the economy shows no signs of slowing down, contrary to what analysts say.
Unemployment Rise: Does It Affect Bitcoin?
Despite the fact that GDP is in the red for both Q1 and Q2, you can see that the American labor market is flourishing. But the reduction in job vacancies is a red flag that the US economy could see a potential increase in unemployment over the next couple of months.
Bitcoin and other crypto could be affected by this trend – as they are every time the stock market plunges, although that’s a different story. But come to think of it, there might be a relationship in there somewhere.
When this happens, when jobs become scarce, people will have less purchasing power. As a result, businesses will experience a slowdown as demand for products also declines.
Image: GOBankingRates
Meanwhile, the Federal Reserve has just raised interest rates in an effort to slow inflation to at least 2%. That said, the job market is also tight as of press time.
Crypto immediately felt the effects after the Fed’s rate hike. So there is that connection.
When people lose their jobs, the economy can crash, meaning that economic activity is derailed. When this happens, business traders will rather hold onto their money than invest in the markets – or they will choose to invest in extremely volatile instruments such as Bitcoin and other cryptocurrencies.
The S&P 500 will affect the crypto and stock markets
The plunge in the creation of new jobs is also largely linked to the price of the S&P 500. According to the charts, the S&P 500 affects new job openings that were seen in 2003, 2009 and also in 2020.
The S&P 500 appears to be experiencing a bearish move with the sudden drop in job vacancies. In fact, even the inflation rate is nowhere near the central bank’s target.
The Fed is tightening the reins on monetary policy, so it looks like unemployment will continue to rise in the coming days.
The Bitcoin price is also closely related to the S&P 500. The charts show that both BTC and SPX have fallen at the same time as seen on December 18 and also in March 2020. It seems that both the crypto and stock markets may dive down the coming days.
BTC total market cap at $389 billion | Featured image from Robert Half, Chart: TradingView.com
