The job market in the United States showed signs of weakening in July, as only 114,000 jobs were added during the month and the unemployment rate increased to 4.3%, according to the Bureau of Labor Statistics. This number fell short of the expected 175,000 jobs and was a decrease from the 179,000 added in June, which was revised down from the initially reported 206,000.
The unemployment rate of 4.3% in July was higher than the 4.1% in June and above the forecasted 4.1%. The price of bitcoin remained relatively stable at $64,500 after the release of the data, showing little change from 24 hours prior. However, the reaction in traditional markets was more significant, with the 10-year Treasury yield dropping 15 basis points to 3.83% and the two-year yield falling 23 basis points to 3.93% – the lowest levels in over a year. Stocks did not respond positively to the numbers, as Nasdaq futures were down 2.3% and the S&P 500 was 1.6% lower.
The dollar depreciated by 0.6% following the report, while gold saw an increase of 1.3% to $2,513 per ounce. Average hourly earnings rose by 0.2% in July, falling short of the expected 0.3% increase, and were higher by 3.6% annually compared to the expected 3.7% and the 3.8% in June. Average weekly hours also missed expectations, coming in at 34.2 against the forecasted 34.3 and the 34.3 in June.
Traders, who had already factored in a 25 basis point Federal Reserve rate cut in September, are now increasing their bets on a larger cut. According to CME FedWatch, there is a 70% chance of a 50 basis point cut in September, up from 22% just a day ago. Traders are also starting to bet on a total of 125 basis points in rate cuts between now and the end of the year, compared to the previous expectation of 75 basis points in 2024. This shift in market expectations reflects concerns about the slowing job growth and the potential impact on the overall economy.