U.S. Job Growth Surges with 216K Adds in December, Outshining Crypto Predictions

• Employment Figures for December 2023 Exceed Economic Predictions
• Bitcoin Value Remains Steady after Initial Dip
• Additional Data Points from December 2023 Jobs Report
• Traditional Markets Begin 2024 on Unsteady Ground
• Implications for the Federal Reserve
• U.S. Stock Equity Futures Respond to Job Report

Employment Figures for December 2023 Exceed Economic Predictions

The United States' economy witnessed the addition of 216,000 jobs in December 2023. This is a significant stride, considering the economist's estimation of 170,000, and a substantial increase from November's 173,000, which was revised from the initial report of 199,000. The unemployment rate remained stable at 3.7%, surpassing the forecast for a 3.8% rise.

Bitcoin Value Remains Steady after Initial Dip

Following these impressive employment figures, Bitcoin$42,260 -0.64%'s value (BTC), which had been primarily centered on the likelihood of a spot ETF acceptance over the past few weeks, fell slightly. However, the cryptocurrency managed to regain ground and remained almost unchanged for the day, standing at $43,900.

Additional Data Points from December 2023 Jobs Report

Other important data points from the report include a stronger than expected increase in average hourly earnings. Earnings rose by 0.4% in December, outpacing the prediction of 0.3%. On a yearly basis, average hourly earnings increased by 4.1%, compared to the estimate of 3.9% and an improvement from November's 4.0%.

Traditional Markets Begin 2024 on Unsteady Ground

Traditional markets have experienced a rocky start in 2024, with the Nasdaq reporting a five-day losing streak, the first such occurrence since late 2022. The 10-year Treasury yield, which saw a dramatic decline of over 120 basis points in the last quarter of 2023 due to rate cut hopes, has risen 25 basis points in recent sessions and crossed the 4% mark again.

Implications for the Federal Reserve

The CME FedWatch Tool approximates a 65% likelihood of a rate cut by the U.S. Federal Reserve at or before its March meeting. Additionally, by the end of the year, the markets predict an almost 80% chance of a 125 basis point or higher rate cut. While the recent economic data, including a mild slowing of growth and continuous inflation easing, supports the argument for the Fed to maintain its benchmark fed funds rate range at 5.25%-5.5%, the numbers thus far, including the current job numbers, are far from supporting the case for a long and deep series of rate cuts.

U.S. Stock Equity Futures Respond to Job Report

Edited by Jonathan Stoker