Key facts
- US initial jobless claims fell 10,000 to 196,000 in the week ending September 12.
- The 4-week moving average of jobless claims dropped to 203,250.
- The Federal Reserve hiked its benchmark interest rate by 25 basis points to 3.75%-4.00% on Wednesday.
- The Fed's median year-end federal funds rate forecast is 4.1%.
- Bitcoin rallied 1.25% to $76,800 after the jobs figures, then hovered around $76,051.
Bitcoin experienced a volatile trading session on Thursday as a stronger-than-expected US labor market report fueled concerns about the Federal Reserve's interest rate policy.
Initial jobless claims fell to 196,000 in the week ending September 12, a significant drop from the previous week's 206,000 and below the forecast of 207,000. The 4-week moving average also decreased to 203,250. This data suggests a robust labor market, which could give the Fed more room to maintain higher interest rates or pursue further hikes to combat inflation.
This development comes just after the Federal Open Market Committee (FOMC) decided on Wednesday to raise its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%. The central bank cited robust economic growth, strong domestic spending, and high inflation as reasons for the hike, noting that job growth was consistent with the labor force size.
The Fed's latest projections indicate a potential for another rate increase this year, with the median forecast for the year-end federal funds rate at 4.1%. Strong labor data reinforces the view that inflation may not be decreasing quickly enough for policymakers to consider easing monetary policy.
Goldman Sachs has adjusted its outlook, now forecasting one additional 25-basis-point rate hike this year, a change from its previous prediction. This update followed mixed signals from Fed policymakers regarding the necessity of further tightening to achieve the 2% inflation target.
In response to the jobless claims data, Bitcoin initially surged 1.25% to $76,800 before retreating to around $76,051, a 1% decrease from an hour prior. Analysts are closely watching key resistance levels, with some noting Bitcoin's proximity to a higher high range around $82,000. Other analysts see resistance in the current price zone, with significant resistance expected between $80,500 and $81,200.