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Understanding U.S. Non-Farm Payroll Data: Why Does It Influence Bitcoin's Price Movements?
On the monthly non-farm payroll release night, global digital currency investors focus on these two numbers, as if they hold an invisible lever that can move the market.
"U.S. Non-Farm Employment Data" and "Unemployment Rate" are the most closely watched indicators at the start of each month in the global capital markets. On the surface, these two figures only reflect the employment situation in the U.S., but in reality, they can trigger intense fluctuations in global stock markets, forex markets, bond markets, and digital currency markets.
Why does employment data from across the ocean affect Bitcoin's price?
There is a clear transmission chain behind this: Employment Data → Federal Reserve Policy Expectations → U.S. Dollar Global Flows → Risk Asset Prices. Understanding this chain can help investors better grasp market trends.
01 Core Indicators, a Double Act of Economic Thermometer and Blood Pressure Monitor
U.S. Non-Farm Payrolls refer to the total number of new jobs added in the U.S. non-agricultural sector each month. You can imagine the entire U.S. economy as a giant company, and this number is equivalent to the number of new employees hired each month.
The more people a company hires, the more it indicates business expansion and confidence in the future; conversely, fewer hires may signal contraction. This is the most direct "thermometer" for measuring economic health.
The unemployment rate measures the proportion of people wanting to work but unable to find employment in the labor market. It is the economy's "blood pressure monitor," reflecting resource utilization efficiency and social stability. Usually, these two indicators move in sync: when the economy is good, employment increases, and unemployment decreases.
However, short-term divergences can occur, such as during early economic recovery, when more people re-enter the job market, causing the unemployment rate to temporarily rise.
02 Transmission Hub, the Federal Reserve's Policy Balance
As the central bank of the United States, the Federal Reserve bears two core tasks: stabilizing prices and achieving maximum employment. Non-farm payroll and unemployment rate data are the main indicators for assessing the progress of the "full employment" goal.
When non-farm payrolls remain strong and the unemployment rate is at historic lows, the Fed worries about the economy overheating. Everyone has a job, wages are rising, and consumption is vigorous, which can push prices higher and trigger inflation.
At this point, the Fed tends to step on the "brake" — raising interest rates to cool the economy.
Conversely, when non-farm payrolls weaken and the unemployment rate soars, the Fed fears recession. Companies stop hiring, people hesitate to spend, and economic vitality declines. In this case, the Fed presses the "accelerator" — lowering interest rates to stimulate investment and consumption.
The Fed's decisions depend entirely on the "temperature" of economic data. This monthly "health report" determines the direction and intensity of monetary policy.
03 Global Flows, the Tides of the U.S. Dollar's Rise and Fall
The Fed's interest rate decisions have a global impact because the U.S. dollar is the world's primary reserve and trading currency. To understand this mechanism, imagine the dollar as an "employee" working globally.
When the Fed raises interest rates, it means the "employee" dollar in the U.S. is...