The U.S. non-farm payrolls added 29,000 jobs in September, far below the 90,000 expected, leading to a decline in Fed rate hike probabilities and Bitcoin approaching $87,000, as markets adjusted to the data.
The U.S. labor market delivered a shock on Friday, with non-farm payrolls rising by only 29,000 in September, while the unemployment rate climbed to 4.2%, contrary to expectations of stability. This data sparked rapid shifts in financial markets, with the Federal Reserve’s October rate hike odds dropping to 15% from 25% earlier in the week, according to Blockcast and PChome.
U.S. Jobs Data Falls Far Short of Expectations
The 29,000 job gain was less than a third of the 90,000 economists had forecast, marking the second straight month of below-expected growth. August’s numbers were also revised lower, from 162,000 to 133,000, showing a broader cooling trend. The unemployment rate’s unexpected rise to 4.2% from 4.1% added to concerns about a weakening economy. Blockcast noted that while there’s no evidence of mass layoffs, hiring has slowed significantly, with businesses reducing recruitment.
Markets responded quickly.
According to BigGo, the Dow Jones Industrial Average rose 250.40 points to 51,176.96, the Nasdaq Composite gained 319.26 points to 27,190.86, and the S&P 500 added 56.27 points to 7,722.72. These gains followed a week of volatility as traders adjusted to the revised employment data. The 10-year U.S.
Bitcoin and Bonds: Winners in the Fed’s Uncertainty
BTC surged to within striking distance of $87,000, driven by the Fed’s reduced rate hike odds and falling Treasury yields.
According to Blockcast, Bitcoin traded at approximately $86,667, with a daily high of $86,984 and a low of $83,457, a 3.8% daily increase. This brought BTC close to the $87,000 threshold, a key psychological level. The price movement coincided with a shift in market sentiment, as traders reassessed the Fed’s policy path.
The bond market also reacted sharply.
Fed Faces Tough Choice on Policy Path
The data has forced a reevaluation of the Fed’s policy path. While the 15% chance of a rate hike in October now dominates market expectations, PChome reported that the CME FedWatch tool shows a 77% probability of a pause. However, the Fed’s long-term stance remains uncertain, with some officials suggesting that a December hike could still occur if inflation persists.
Chicago Fed President Austan Goolsbee told Stheadline that the Fed could still raise rates if inflation remains stubborn. Meanwhile, Cleveland Fed’s Beth Hammack emphasized that the labor market’s “balance point” suggests stability, leaving room for a cautious approach.
According to NowNews, wealth management firm Osaic’s Chief Market Strategist Phil Blancato stated that the labor market data was exactly what the market wanted—neither too hot nor too cold. This sentiment influenced the CME FedWatch tool, which showed a 77% probability of the Fed maintaining rates in October. However, the market still priced in a 90% chance of a December hike, according to Reuters.
The implications for the economy are still uncertain. Weaker jobs data may signal a slowing labor market, raising concerns about the Fed’s ability to balance inflation control and economic growth. PChome noted that the Fed’s next move will depend on whether the slowdown is temporary or a sign of broader economic weakness.
The next major event for markets will be the Fed’s October 27-28 meeting, where policymakers will decide on rates. If the central bank opts to pause, it could provide a temporary boost to risk assets, but the broader question of whether the economy is slowing too quickly will linger.