Bitcoin was reasonably stable around the $16,850 mark as US non-farm productivity increased by 0.6% in Q4 2022.
Marginal quarter-on-quarter increase in productivity Makes it possible for employers to raise wages without worrying about their contribution to inflation. It should be slightly bullish for investors in riskier asset classes as it lowers the chances of a US recession.
Non-farm productivity rises and pandemic pressure eases
Productivity increased in the fourth quarter Follows an adjusted growth of 0.8% in the third quarter Which broke with the decline of the previous two quarters. Companies found themselves spending extra money to attract and retain employees after the pandemic.
non-farm productivity Measures labor efficiency of non-agricultural workers producing goods and services, It is calculated by dividing the real production index by the index of hours worked by each worker. Workers include employees and unpaid family workers.
Employers can invest in new equipment and systems to improve worker productivity without contributing to inflation.
Non-farm productivity unable to quell recession fears
Productivity gains in the second quarter should have been a welcome surprise as the November jobs number last week showed that wage growth was outpacing the Federal Reserve’s efforts to rein in inflation.
rather than, The futures price of the stock market fell in early trade. The decline came as fears of a recession in 2023 extinguished the glimmer of hope offered by higher labor productivity.
The futures price of the stock market fell in early trade. Dow Jones futures fell 0.5%, S&P 500 futures fell 0.7% and Nasdaq futures fell 1.1%.
Major cryptos including bitcoin and ethereum recovered marginally after the announcement but most were almost flat $16,850 and $1,230.00 respectivelyBreaking step with the stock market.
While investors have experienced significant losses on their cryptocurrency investments over the past six months, bitcoin’s relatively stable price has recently indicated that the pain may be abating.
Even then, A Technical Analyst at Fairlead Strategies believes that the potential for a positive breakout is limited.
“We respect the lower highs and lower lows that define prevailing downtrends,” said Katie Stockton, a partner at Fairlead. “While near-term momentum has improved for Bitcoin, recent breakouts and bearish trend-following indicators suggest it is best to stay on the sidelines.”
Inverted Treasury Curve Points to an Imminent Recession
Despite recent employment and consumer data that Suggest that the Fed’s aggressive tightening policies are paying offStrong non-farm wage growth in November has led some investors to believe it will keep raising rates longer than expected, raising the prospect of a recessionary economy.
The current fed funds rate is around 3.8%, after six consecutive increases in 2022.
“All told, financial indicators point to recession on the horizon”Azhar Iqbal of Wells Fargo told bank customers on December 7. He said the so-called inverted Treasury yield curve, a predictor of inflation since the 1960s, is one indicator.
yield curve inversion happens when investors come for government investment Low risk, such as Treasury instruments, which pay a yield at varying fixed intervals.
In a market plagued by fears of a recession, investors are scrambling for long-term Treasury investments, as a 10 year bond, This increased demand lowers the yield of a long-term instrument.
the gap or difference between, as it occurs treasury bond yield It turns more negative in the short and long term, heralding a bearish trend.
At press time the yield spread between two-year and 10-year Treasuries is -0.8%.
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