Key Points:
- Bitcoin’s surge beyond $95,000 has been countered by disappointing U.S. economic indicators.
- The first quarter GDP declined by 0.3%, primarily driven by increased company imports anticipating tariffs.
- The ADP report indicates that only 62,000 jobs were added in April, far below the expected 108,000, representing the slowest employment growth since July 2024.
Recent data from the U.S. has turned the market from positive to negative, igniting fears of stagflation. Earlier today, the ADP reported that only 62,000 jobs were generated in April, significantly lower than the anticipated figures. This is the weakest growth recorded since July 2024.
The subsequent release of first quarter GDP figures revealed a contraction of 0.3%, undermining earlier estimates predicting 0.2% growth. Companies had accelerated imports in early 2025 in anticipation of new tariffs, impacting GDP adversely due to the influx of goods without a corresponding increase in exports.
This uptick in imports reduced GDP growth by nearly 5% in the first quarter. Additionally, increased government expenditure, alongside rising imports, combined to drag on growth for the first time since 2022.
Inflation indicators also raised red flags; the Core PCE price index rose by 3.5%, surpassing forecasts of 3.1%.
Consequently, the stock market has taken a hit; the Nasdaq dropped by 2%, while the S&P 500 fell by 1.5%, causing Bitcoin prices to dip to approximately $94,300.
