Replays · US payrolls (NFP) · 3 Apr 2020, 13:30 UK

The first pandemic jobs report, and a slide rather than a shock

This was the first payrolls report to show the pandemic. It was also, in a way, out of date before it was published. The survey had been taken in the middle of March, before most of the US shut down, and weekly jobless claims had already shown nearly ten million people filing in two weeks. Markets knew the number would be bad. What they did with it is more interesting.

The figures

Payrolls fell by 701,000 in March, against a gain of 275,000 the month before after revisions. It was the first fall since 2010. The unemployment rate rose from 3.5%, a fifty-year low, to 4.4%, the biggest one-month rise since 1975. Bad as they were, both figures understated what was happening. The April report a month later would show a loss of more than 20 million jobs.

Four hours of steady selling

There was no single big candle. Bitcoin lost 1.2% in the first quarter hour, recovered a little, then kept drifting lower all afternoon. By the four-hour mark it was down 4.7%, close to its low of about $6,610. The first hour on its own was -1.4%, 3.0 times a normal hour, and #12 of 117 jobs reports by that measure. That is a large reaction, but most of the move came later than the hour suggests.

Ether followed almost the same path and finished four hours down by a similar amount. XRP and Litecoin fell by about 3%. Stocks took a different route: the S&P 500 ETF rose 0.8% in its first fifteen minutes after the open, then turned lower and ended its four-hour window down 1.7%. Crypto had started falling an hour before stocks did.

What came after

The slide did not last. A week later Ether was 8.9% above its price at the release, and Bitcoin was down only 1.2%. In the weeks that followed, as the Fed's bond buying grew, crypto entered the recovery that would become the 2020 to 2021 bull market. Seen from that distance, the jobs report was one of the last bad days of the crash rather than the start of a new leg down.

Sources: release time and figures from the U.S. Bureau of Labor Statistics (public domain), first-print values via ALFRED, Federal Reserve Bank of St. Louis. Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.