Bitcoin Little-Changed on Soft Economic Data Ahead of Fed Meeting
Private hiring slowed to its weakest level in 2 years, according to the ADP National Employment Report, with just 106,000 jobs added in January. In addition, the manufacturing sector continued to contract, with the ISM Manufacturing Survey for January dipping to 47.4.
Bitcoin (BTC) barely noticed the news, continuing to trade flat over the last 24 hours at just above $23,000. After a brutal 2022, the crypto has moved higher so far this year, in part as many are expecting a slowdown in the economy and inflation, and perhaps easier monetary policy from the U.S. Federal Reserve.
The ADP report of 106,000 jobs added was a slowdown from an upwardly revised 253,000 in December and well shy of economist forecasts for 180K. It was the weakest report since a negative print in January 2021. The ADP took note of weather-related disruptions (likely the California storms) during its survey reference week in the middle of the month.
Coming in at 47.4, the ISM survey was down from 48.4 in December and short of expectations for 48.0. It was the weakest level since May 2020. "The U.S. manufacturing sector again contracted, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began," said Timothy Fiore, Chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. The New Orders subindex – considered a forward-looking indicator – plunged to 42.5 from 45.1 a month earlier.
Later on Wednesday, the results of the Fed's Federal Open Market Committee (FOMC) will be released, with markets fully expecting the FOMC to hike its benchmark Federal Funds rate by just 25 basis points to the 4.50-4.75% range. Eyes will be focused on the committee's statement to try and determine whether or not it intends to continue to raise rates or whether it is mulling a pause in the tightening cycle at its next meeting in March.