The US labor market sent shockwaves through Wall Street, with Bitcoin (BTC) moving in response.
Data shows that the August employment report has led to the weakest salary increase since 2021, sparking alarms about the health of the US economy while spurring new demand for alternative assets like Crypto.
Bitcoin wins as investors react to cracks in the US employment image
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The U.S. Bureau of Labor Statistics (BLS) reported in August that it added just 22,000 jobs to the economy well below its 75,000 forecast.
Meanwhile, the unemployment rate rose to 4.3%, the highest since October 2021. This highlights a crack in the labour market that previously appeared to be resilient.
The revisions to past reports have deepened the darkness, with the figures for June and July being revised with a total of 285,000 jobs.
“That’s a total of -285,000 jobs in two months. What’s going on here?” the analyst posed.
Washington Post’s Heather Long highlighted the August printout as another weak employment report. However, wages rose 3.7% year-on-year, 2.7% above inflation, but a wider slowdown cannot be denied.
Deterioration comes with impressive details. Bloomberg reported that American companies announced just 1,494 new jobs in August, the lowest of that month since 2009. Meanwhile, layoffs rose 39% to 85,979.
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More concerns have led to the number of unemployed people surpassing available jobs for the first time since April 2021.
July data showed 7.18 million job openings for 7.24 million unemployed people.
Weak job data strengthens the role of Bitcoin as a macro hedge
Analysts point out multiple causes as simple job acquisitions are no longer on the table. Among them, Trump’s tariffs have reduced business trust.
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Others also point to the disruptive role of artificial intelligence (AI) in reshaping the job market.
Nevertheless, the market responded quickly, with Bitcoin rising to $113,000 amid attempts at recovery. At the time of writing, BTC was trading at $112,974, an increase of more than 2% in the last 24 hours.
A surge occurs as US labor market data grows as a key macro for Bitcoin. The appeal of Pioneer Crypto as an alternative asset has acquired the traction that it presents as a hedge against weakening the macroeconomic foundations.
The difference between work and inflation complicates the picture. While wage growth remains stable, the slowdown in employment suggests that the Fed faces difficult balancing acts ahead of the policy meeting in September.
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Rate expectations are changing rapidly, but the underlying theme is that the economy is shaking and investors are searching for safety far beyond the job market.
Bank of America now predicts that the Fed will cut interest rates twice this year. This is a major revision after forecasting that there will be no interest rate cuts in 2025.
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With accelerated layoffs, job creation stalling and unemployment rates rising, the August employment report highlights a turning point for the US economy.
But this is yet another opportunity for Bitcoin as a global barometer of fear, risk and resilience.
