The prices of Bitcoin (BTC), Ethereum (ETH) and XRP have surged sharply higher following the publication of yet another underwhelming jobs report by the U.S. Labor Department.
Bitcoin, the leading cryptocurrency by market cap, reached an intraday peak of $113,402, the highest level since Aug. 14. Other cryptocurrencies, such as XRP and ETH, also spiked sharply higher.
Brutal jobs report
The U.S. economy managed to add only 22,000 jobs in August, which is much worse than initially expected. Notably, 75,000 jobs were expected by analysts, which underscores the severity of the recently published data.
The unemployment rate has ticked up to 4.3%, reaching its highest level since October 2021.
Meanwhile, nonfarm payroll data for June has been revised to a loss of 13,000 jobs from the initially reported gain of 14,000 jobs. Notably, this marks the first time since 2020 that the U.S. has reported a negative monthly nonfarm payroll.
Manufacturing and government jobs are both in the red in August.
Fed rate cut odds surge
The fact that the previously red-hot labor market is now stalling is treated as a bullish development by the market since it bodes well for the odds of the Fed loosening monetary policy.
According to Polymarket bettors, there is currently an 86% chance of a 25-basis-point rate cut being implemented in September.
The odds of a 50-basis-point rate cut have also spiked above 12%, which is a rather notable development.
Earlier this week, Federal Reserve Governor Christopher Waller told CNBC that he was in favor of multiple rate cuts.
As noted by Lisa Abramowicz, co-host of Bloomberg Surveillance, traders are now pricing in 100 basis points of rate cuts by March 2026.
The Fed implemented a 50-basis-point cut in September 2024, which was followed by two 25-basis-point cuts in November 2024 and December 2024.
Since then, the Fed has made a total of five decisions to hold the benchmark interest rate steady. The reluctance to implement further rate cuts resulted in harsh criticism from the Republicans, with the job of Chairman Jerome Powell (as well as the independence of the Federal Reserve) coming under threat.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team