US Nonfarm Payrolls rise above expectations by 311,000 in February, Bitcoin price climbs back above $20,000

The United States Nonfarm Payrolls (NFP) data showed the US economy added 311,000 jobs in February, surpassing forecasts of a 205,000 gain. The month of February was expected to note a relatively lesser increase in the jobs report as compared to January. The enormous increase of 504,000 (revised from 517,000) in January was beyond expectations, but it also noted that the economy was in good shape. 

In addition to the strong jobs report, the unemployment rate rose to 3.6% while the labor force participation rate was little changed at 62.5%, still standing below the pre-pandemic levels of 63.3% in February 2020.

However, another strong jobs report is expected to result in a higher rate hike next month, as stated by FXStreet Lead Analyst Eren Sengezer,

The CME Group FedWatch Tool shows that markets are pricing in a 78% probability of a 50 bps rate hike in March, suggesting that there is more room for additional US Dollar strength in case NFP surpasses the market consensus. 

Still, despite the higher-than-expected job gain, the US Dollar weakened as an immediate reaction, sending the Bitcoin price back above the $20,000 level to the $20,300 area. The unexpected increase of the unemployment rate has helped to temper rate hike expectations. 

Going forward, the Fed is expected to increase the rate by 50 bps in March, a sentiment shared by Chair Jerome Powell as well. Powell on Tuesday was noted saying,

The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.

The crypto market reacts positively

At the time of writing, the crypto market noted a bullish response to the NFP data. Bitcoin price could be seen hovering around $20,200, rising by 1.32% in the last hour after touching its lowest level in two months at $19,550. Altcoins seemed to be following BTC's lead as well.

BTC/USD 1-day chart

Following the release of the NFP report, Ethereum price rose by over 1.02% to trade at $1,406. Cardano price noted a similar reaction gaining 2.32% to $0.3113. XRP could be seen moving at $0.368, noting an increase of 1.21% over the last minutes. Similarly, MATIC price rose by nearly 2% and was trading at $1.00.