Breaking: Bitcoin Turns Volatile As US Initial Jobless Claims Drop To 196K

Bitcoin struggled with a bumpy ride on Thursday as new U.S. labor-market data indicated that weekly jobless claims dropped massively. This raised questions on how the report might affect the Fed’s interest rate trajectory after the latest rate hike.

US Initial Jobless Claims Plunge Massively

U.S. initial jobless claims fell 10,000 to 196,000 in the week ending September 12, according to Department of Labor data. This figure is much below the forecast of 207,000 and lower than the previous week’s 206,000. Also, the 4-week moving average dropped to 203,250.

Lower jobless claims are hawkish for the Fed as it suggests a healthier labor market and less firings. That matters because the Fed has less reason to worry that high interest rates are weakening employment, while it can keep rates higher or hike again to fight inflation. The Labor Department also calls initial claims a leading economic indicator (with a warning that the weekly numbers can be volatile).

That relationship has become extremely critical after the FOMC decision on Wednesday. The Fed’s decision to hike its benchmark interest rate by 25 basis points to 3.75%-4.00% was driven by robust economic growth, strong domestic spending, and high inflation. Job growth was also at a level consistent with the size of the labor force, the central bank added.