Cryptocurrency markets were on edge this week after important data was released in the United States. From inflation printing to retail sales, the data presented many lessons for digital asset enthusiasts. Here are three important points for crypto investors to keep in mind as they read this week's economic data.
Fed rate cut
Both CPI and PPI data suggested that inflation had proven more robust than the market had hoped. The US PPI inflation data was released at the same time as the weekly unemployment rate data. U.S. PPI inflation data released Friday by the Bureau of Labor Statistics shows 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, against economists' expectations of 0.3%. On the other hand, it rose 0.3% in January as well.
Contrary to expectations, the annual U.S. inflation rate rose to 3.2%, higher than January's figure and at a level not seen since 2021. Despite this, consumer prices rose by 0.4% month-on-month, a slight increase from 0.3%. Due to rising gas prices. The data points showed better-than-expected results and suggested it may take some time for the Fed's rate cuts to finally take effect. But the market quickly gained confidence and began betting on a rate cut as early as June.
Unemployment is getting worse
Cryptocurrency markets breathed a sigh of relief following this week's unemployment statistics. There were 209,000 new claims for unemployment benefits for the week ending March 9, according to weekly data released Thursday by the U.S. Department of Labor (DOL). This print count was revised to 210,000 from last week's 217,000, above the market consensus of 218,000. Typically, when unemployment is low, the number of day traders is high. When more people have stable jobs, investors' risk appetite typically increases. This will help the crypto market.
No buying pressure for crypto investors
Some investors believe that inflation is not very likely to rise again and that the U.S. economy is stable until further growth is possible. This is evidenced by slowing employment and income growth. In such cases, the purchasing pressure that usually occurs when people cannot afford trickles down.
