Traders lowered the probability of a September Federal Reserve rate hike to 44% after US non-farm payrolls fell by 23,000 in July, below forecasts, while Bitcoin rose modestly to $65,300 in the hour following the release.
The Bureau of Labor Statistics reported a sharp shortfall in July employment, with payrolls missing the Dow Jones consensus forecast of 83,000 by a significant margin. The CME Group’s FedWatch tool reflected the shift, showing a 44% chance of a rate increase in September and 58.3% for October, as weaker-than-expected job growth raised questions about the Fed’s tightening trajectory.
Bitcoin’s price climbed modestly to $65,300 shortly after the data release, though the movement remained limited amid broader market uncertainty. The report also revised down May and June payrolls by 66,000 and 37,000 respectively, compounding concerns over the pace of job creation, which averaged 34,000 per month over the past year.
Annual wage growth slowed to 3.2%, the weakest since May 2021, even as the unemployment rate dipped to 4.1%. However, the labour force participation rate fell to 61.4%, suggesting potential underutilisation of the workforce.
Chris Zaccarelli of Northlight Asset Management highlighted the report’s implications, noting that it shifted focus from inflation to labour market risks, which could influence the Fed’s policy decisions. The Federal Open Market Committee’s decision to hold rates steady at 3.50% to 3.75% on July 29 underscored its cautious approach amid mixed economic signals.
Written by Kate Hollinsworth
Economics Desk
