U.S. May Payrolls Far Exceed Forecasts, Rate-Hike Bets Pressure Risk Assets
The U.S. Labor Department's monthly nonfarm payrolls and unemployment data are key gauges used by the Federal Reserve to assess inflation, wage pressures and interest-rate policy. Continued labor-market resilience would reduce the urgency for Fed rate cuts, tighten expectations for dollar liquidity and weigh on valuations of risk assets such as cryptocurrencies.
The Labor Department's latest data showed nonfarm payrolls rose by 172,000 in May, well above market expectations, while the unemployment rate held at 4.3%. After the release, traders increased bets that the Fed would delay rate cuts this year or even resume raising rates. The more hawkish rate outlook added pressure on cryptocurrencies and other risk assets.
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The history behind this eventBitcoin Falls Below $80,000 as US Jobs Surprise Lifts Fed Hike Odds
US nonfarm payrolls are a key gauge of labor-market strength and a major input into the Federal Reserve’s assessment of inflation risks. Strong hiring can signal that the economy remains resilient enough to withstand tighter monetary policy, prompting traders to scale back expectations for easing. That backdrop typically weighs on Bitcoin, a non-yielding asset whose valuation is sensitive to interest rates, dollar strength and global liquidity.
US payrolls increased by 162,000 in August, far exceeding market expectations and lifting the implied probability of a Federal Reserve interest-rate increase in September to 58%. The surprise revived tightening bets and triggered a pullback across risk assets. Bitcoin retreated from its recent swing high and fell below the $80,000 threshold as traders adjusted positions for the prospect of higher borrowing costs.
US Sheds 23,000 Jobs in July, Cooling Fed Rate-Hike Bets
The US nonfarm payrolls report is a key gauge of labor-market momentum and a major input into Federal Reserve policy decisions. A sharp slowdown in hiring can signal easing economic and wage pressures, weakening the case for additional rate increases. That makes employment data an important catalyst for equities, bonds and cryptocurrencies, particularly when investors are reassessing the path of borrowing costs.
US employment unexpectedly fell by 23,000 jobs in July, sharply undershooting the market consensus for an 80,000 increase. The surprise pushed the implied probability of a Federal Reserve rate hike in September below 50%. Stocks and bonds advanced as investors pared tightening expectations, while the cryptocurrency market showed a comparatively muted response to the weaker-than-expected labor data.
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