U.S. Jobs Report Falls Far Short of Expectations: Bitcoin Nears $87,000!
Nonfarm payrolls in the U.S. rose by just 29,000 in September, versus expectations for a 90,000 increase, while Bitcoin traded just below $87,000 after the report.
A report from the U.S. Bureau of Labor Statistics, cited by CoinDesk, showed a weaker-than-expected labor market. The shortfall in job growth was accompanied by a rise in the unemployment rate and a downward revision to the previous month’s figure.
Job growth slowed, unemployment exceeded expectations
Nonfarm payrolls increased by 29,000 in September. Expectations were for an increase of 90,000. The previously reported increase of 162,000 for August was revised to 133,000.
The unemployment rate also rose from 4.1% to 4.2%. The market had expected it to remain at 4.1%. As a result, both the employment and unemployment figures in the report pointed to a weakening labor market.
How could this affect the Fed’s rate-hike outlook?
The weak employment picture could give the Fed room to hold rates steady, even as inflation remains elevated. Markets had priced in a second rate hike at the October 28 meeting almost completely at the start of the week, but those expectations had declined significantly before the data was released.
The probability of a rate hike had fallen to 23% in the 48 hours before the report was released. That figure therefore reflects expectations before the announcement, not the new pricing afterward. After yields rose throughout September, buyers had also returned to the bond market in the latter part of the week.
How did Bitcoin react initially?
After rising ahead of the report, Bitcoin continued to trade just below $87,000 in the minutes after its release. The initial picture showed that it had held on to its gains for the day.
U.S. stock futures extended their gains. Nasdaq futures rose 1.2%. The weak employment data emerged as a development that could support market expectations that the Fed may hold off on another rate hike rather than raise rates again.