The US labor market picked up steam in December, with job growth topping economists’ forecasts by a mile and the unemployment rate unexpectedly falling.
The economy added 256,000 jobs last month, the Bureau of Labor Statistics reported Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from the 227,000 initially reported).
Unemployment fell to 4.1% in December against an expected 4.2% and November’s 4.2%.
Trying to rally from significant declines earlier in the week, bitcoin (BTC) fell more than 2% in the immediate aftermath of the report to $92,800.
Today’s labor market readings came after a flurry of recent economic reports sparked a broad market pullback across asset classes as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Previously high-flying crypto markets bore the brunt of the selling, with bitcoin falling from nearly $103,000 on Monday to below $92,000 at one point on Thursday. Major altcoins suffered even greater declines on a percentage basis.
A check of traditional markets shows US stock index futures down about 1% after the jobs posting. The strongest reaction is in the bond market, where the 10-year Treasury yield rose nine basis points to 4.78%. The dollar index also rises by 0.6 per cent. Gold has moved modestly lower to just below $2,700 per ounces.
Traders are quickly scaling back bets on further Fed rate cuts in 2025, with the odds of a move in March falling to 28% from 41% just before the report, according to CME FedWatch. The odds of an interest rate cut in May have fallen to 34% from 44% previously.
In other closely watched report details, average hourly earnings rose 0.3% in December, compared with forecasts for 0.3% and November’s 0.4%. On an annual basis, average hourly earnings were higher by 3.9% compared to expectations of 4% and November’s 4% figure.
