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Highlights
- Both the CPI and PPI data suggested that inflation is proving to be sticker than what the market would have wanted it to be.
- Crypto markets took a sigh of relief with this week's unemployment data.
- The US economy has stabilized to the point where more growth is possible without much likelihood of inflation increasing again.
Crypto markets were on the edge this week with the release of key data in the United States. From inflation prints to retail sales, the data indicated a plethora of takeaways for digital asset enthusiasts. Here are the top 3 key takeaways that crypto investors should keep in mind while reading this week’s economic data.
Fed’s Rate Cuts
Both the CPI and PPI data suggested that inflation is proving to be sticker than what the market would have wanted it to be. The US PPI inflation data was released concurrently with the weekly unemployment figures. The US PPI inflation data released on Friday by the Bureau of Labor Statistics show that wholesale inflation peaked in February. The PPI index, which measures the price at which raw materials are sold on the open market, registered 0.6% in February as opposed to the 0.3% economists had projected. In comparison, there was a 0.3% increase in January as well.
In contrast to expectations, the US annual inflation rate came in at 3.2%, exceeding January’s numbers and continuing at levels not seen since 2021. Nonetheless, consumer prices rose by 0.4% from the prior month—a minor increase from 0.3%—mainly due to a spike in gas costs. The data points, which initially showed hotter-than-expected results, indicated that the Fed’s rate cuts might take time before finally coming into play. However, the market quickly gained its belief and ended up placing bets for a rate cut to happen as early as June.
Unemployment is Tricking Down
Crypto markets took a sigh of relief with this week’s unemployment data. In the week that ended on March 9, there were 209,000 new claims for unemployment benefits, according to weekly data provided by the US Department of Labor (DOL) on Thursday. This print followed last week’s corrected 210,000 from 217,000 print, and it performed better than the market consensus of 218,000. Usually, lower unemployment translates to a higher number of day traders. With more people having a secured job, the risk appetite among investors usually goes up. This in return helps crypto markets.
No Purchasing Pressure for Crypto Investors
Some investors think that the US economy has stabilized to the point where more growth is possible without much likelihood of inflation increasing again. The slowdown in employment and income growth is indicative of this. In such a case, the purchasing pressure which usually occurs when people are not able to buy trickles down.
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