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Cryptocurrency’s Hopeful Aspect: How Declining US Job Growth Could Bolster Markets


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Since the economic impacts of the COVID-19 pandemic, the US labor market is making gradual progress toward recovery. Despite encouraging recent job growth, it has fully returned to pre-pandemic levels. However, the cryptocurrency market has benefited despite the gradual recovery.

Slow job growth and cryptocurrency in the US

According to the latest employment data, the United States created 236,000 jobs in March, more than the forecast of 228,000 jobs. Although this seems like a slight difference, it is essential to remember that these numbers can greatly affect the economy and the job market.

The labor force participation rate, which remains at 61.4%, well below the pre-pandemic level of 63.3%, reflects a slow labor market recovery. This may indicate that many people are still reluctant to enter the labor market or find it difficult to find work.

Moreso, the Fed’s accelerated rate increases over the past year contributed significantly to the slowdown in job growth in March amid the fight against inflation.

Poor job growth has greatly affected the economy, resulting in financial instability for many people. However, some people have found some solace in the rise of cryptocurrencies. Many people have invested in digital assets to make money, as the regular job market has been slow to recover.

Since February 2020, the United States economy has lost 9.5 million jobs. Moreover, some sectors, including the hospitality and leisure industry, have been hit harder than others and are recovering.

Over the past years, the crypto industry has grown exponentially, with Bitcoin (BTC) reaching record highs of over $69,000.

While risks are associated with investing in cryptocurrencies, it has given people a way to make money in an era when traditional business options are few. Some of these people may continue to be exposed to and use digital assets as a secondary source of income when the job market gradually improves.

US job growth and Federal Reserve rates

The Federal Reserve (Fed) has been one of the key players in this economic expansion. The Fed has greatly influenced job growth through its regulation of interest rates. It can change interest rates to control inflation, and influence job creation and unemployment rates.

When the Fed lowers interest rates, companies can borrow money for less money, which can lead to more investment and job growth. When borrowing costs are lower, companies are more willing to invest in new endeavors or augment existing operations. Lower loan rates can also encourage consumer spending, creating jobs as companies adjust to the resulting rise in demand.

Moreover, the cost of borrowing money for businesses increases when the central bank raises interest rates, which can lead to less investment and thus slower job growth. Increased interest rates may also lead to lower consumer spending, which hurts businesses and ultimately leads to job losses.

Their decisions can greatly affect the number of jobs changed. While many factors influence unemployment rates and job creation, the central bank has a key tool in its arsenal thanks to its power over interest rates.

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