Recaps · US payrolls (NFP) · 8 Jul 2022, 13:30 UK
Strong jobs in a bear market
In July 2022 the Fed was raising rates fast and crypto was in a deep bear market. A strong jobs report should have hurt. It did, for about fifteen minutes. Then Bitcoin and tech stocks recovered, and the Nasdaq finished its fifth straight daily gain.
- Release
- Friday 8 July 2022, 13:30 UK
- Payrolls
- +372,000 vs 268,000 expected (Reuters)
- Unemployment
- 3.6%
- Backdrop
- Fed had hiked 75bp in June
- Bitcoin at release
- $21,600
The numbers
The economy added 372,000 jobs in June, beating the 268,000 consensus (Reuters). Unemployment held at 3.6%. A strong labour market gave the Fed room to keep hiking, and markets were already expecting another 75 basis point move later in the month.
Down, then up
- 1 13:45 UK: low, about 2% down
- 2 16:40 UK: high, about +2.4%
Bitcoin was -1.44% after fifteen minutes and -1.16% at the hour, #20 of 117 jobs reports at 2.5 times a normal hour. It then recovered, reaching about 2.4% up at 16:40 UK, and was +0.28% at four hours. The Nasdaq-100 ETF was +1.56% two hours after the open. The Nasdaq Composite closed 0.12% higher, its fifth gain in a row (AP).
| Market | 15m | 1h | 2h | 4h | 24h | × normal hour |
|---|---|---|---|---|---|---|
| Bitcoin | −1.44% | −1.16% | −0.69% | +0.28% | −0.43% | 2.5× |
| Ethereum | −1.43% | −1.19% | −0.97% | −0.27% | −0.95% | 2.0× |
| S&P 500 ETF (SPY) | +0.17% | +0.47% | +0.80% | +0.27% | – | – |
| Nasdaq-100 ETF (QQQ) | +0.42% | +0.84% | +1.56% | +0.86% | – | – |
Change from the 13:30 UK release. The ETFs are measured from the 14:30 UK open.
Why the drop did not last
By July, the market already expected aggressive hikes. A strong report confirmed that view rather than adding a new one, so the first move faded. A month later, the August report showed 528,000 jobs, a far bigger surprise, and Bitcoin fell 1.7% in an hour and stayed down at four hours. The size of the surprise mattered more than its direction.
The recovery here also fits the timing. Crypto had just been through the collapses of Celsius and Three Arrows Capital, and Bitcoin was trading near its cycle lows. In a market that is already heavily sold, bad news often has less effect. The Fed's July decision came with another 75 basis point hike, and Bitcoin rallied after that too.
The June report a month earlier fits the same pattern. Payrolls beat forecasts then too, and Bitcoin was 0.7% lower after an hour and 1.1% lower at four hours, a small move by its standards. In the summer of 2022, beats of this size moved Bitcoin by about one or two percent and rarely held. Only the much larger August surprise produced a drop that lasted.
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.