US Labor Market Disappoints Sharply
US job growth missed expectations, boosting hopes for lower interest rates and lifting risk assets.
The US labor market slowed significantly in June, with the economy adding just 57,000 new jobs—far below the 110,000 expected by economists.
According to Thursday's Nonfarm Payrolls report, June's employment growth also came in well below the revised May figure of 129,000 jobs.
At the same time, the unemployment rate fell from 4.3% to 4.2%, surprising analysts who had expected it to remain unchanged.
For investors, the biggest takeaway is that weaker labor market data could reduce pressure on the Federal Reserve to raise interest rates further. A lower likelihood of additional rate hikes tends to benefit riskier assets such as cryptocurrencies.
Following the release, Bitcoin held above $61,000 and gained 4% over the past 24 hours. Nasdaq 100 futures also moved higher, while the yield on the 10-year US Treasury bond declined to 4.46%.
Just a few months ago, investors expected the Federal Reserve to begin cutting interest rates in 2026. However, sentiment shifted as rising energy prices fueled inflation, prompting the Fed's new Chair, Kevin Warsh, to adopt a more hawkish stance. As a result, markets began pricing in the possibility of additional rate hikes instead of cuts.
June's labor market report may now reshape those expectations once again. The weaker-than-expected data was welcomed by both cryptocurrency and equity investors, who see it as increasing the chances of a more accommodative monetary policy.
