The drop in macroeconomic uncertainty in the U.S. labor market could be a bullish signal for retail investment in bitcoin.
The US created 916,000 jobs in March, well above expectations of 675,000. The unemployment rate fell from 6.2% to 6%
The gains were led by leisure and hospitality, public and private education and construction.
The leisure and hospitality sector, hit by the pandemic, generated 280,000 jobs.
With vaccination rates rising, macroeconomic uncertainty for the US labor market is decreasing. Although institutions have provided the largest inflows of high-yield assets such as bitcoin (BTC, -0.47%) recently, the decrease in uncertainty may bode well for retail investors in digital assets.
While many investors treat bitcoin as protection against inflation and, in some cases, protection against macroeconomic uncertainty, a recent survey of European families by a University of Texas economics professor, Olivier Coibion, and four other economists showed that households reduced their participation in assets allocated to cryptography by 0.5 percentage points during periods of high macroeconomic uncertainty.
A striking difference between the economic recovery in a pandemic-induced recession and the recovery in previous recessions is the large fraction of unemployment caused by temporary layoffs, said Robert Hall, professor of economics at Stanford University.
“In previous recessions, unemployed people on temporary layoffs were a small fraction of all unemployed people,” said Hall. “The distinction is important because unemployed people on temporary layoffs normally have a much higher rate of return to employment than other unemployed people.”