Unexpected Developments in the US Job Market
In August, the US job market drew attention by displaying slower growth than economists had predicted. While this initially caused a positive reaction in Bitcoin prices, fluctuations occurred shortly after. The unemployment rate in the US fell from 4.3% in July to 4.2% in August, slightly improving the economic situation.
The job report released on Friday surprised the markets by falling short of the anticipated 160,000 job positions. Since this report could influence the decisions of the US Federal Reserve in the coming weeks, Bitcoin rose to $57,000. However, after this rise, the price retraced to around $55,000.
Volatility in Bitcoin Prices
The US Department of Labor reported that local employers added only 142,000 new jobs in August. Compared to July and June, this figure for August brought the three-month average down to 86,000, which is quite low compared to the previous year’s average of 202,000 before the summer of 2024. Nevertheless, the decrease in the unemployment rate stands out as a positive development for the US economy.
The unemployment rate, which climbed to 4.3% in July, showed a slight decrease in August to 4.2%, aligning with experts’ expectations. This data increases the likelihood that the US Federal Reserve will lower interest rates at the end of September. Fed Chairman Jerome Powell hinted at this topic last month, and most reports predict that any potential rate cut will be 25 basis points.
Current Status of BTC Prices
After the US job data fell below expectations, Bitcoin briefly rose before the Wall Street opening on September 6, targeting $57,000. However, this rise was short-lived, and the price dropped to $54,919 on Bitstamp. The non-farm payroll figures released for August raised concerns about labor force strength.
At the same time, a senior Fed official stated that the time for lowering interest rates has come and argued that the decision would be made on September 18. New York Fed President John Williams, in a speech at the Council on Foreign Relations, said, “The current restrictive monetary policy has been effective in stabilizing the economy and reducing inflation. Now that the economy is stable and inflation is moving towards 2%, it would be appropriate to lower the federal funds rate to reduce the restrictiveness of the policy stance.”
CME Group’s FedWatch Tool showed that after the data was released, the market probabilities for a 25% and 50% rate cut became approximately equal. The current situation of the data reflected 53% and 47%. Additionally, the US dollar saw its own rise at the opening. Commenting on the Bitcoin price, Daan Crypto stated regarding the US dollar index (DXY), “DXY remains very weak and is hovering just above the support level of around 101.”
