The US job market is cooling rapidly, a timely blow that could force the Federal Reserve to loosen its purse strings and potentially put a floor under the price of bitcoin .
Planned layoffs, the job cuts that companies have announced but not yet carried out, rose 205% to 108,435 in January, according to data tracked by global outplacement firm Challenger, Gray & Christmas. It is the highest reading since January 2009, months after Lehman Brothers collapsed and pushed the global economy into recession.
Year-over-year, announced layoffs rose 118%, suggesting a sharp weakening of the labor market in the first year of Donald Trump’s second term as president. The technology industry announced 22,291 reductions, with Amazon ( AMZN ) accounting for the most, while United Parcel Service ( UPS ) announced 31,243 planned cuts.
Andy Challenger, workplace expert at Challenger, Gray & Christmas, called it a high number for January, at least a seasonally weak month for hiring.
“This means that most of these plans were set at the end of 2025, signaling that employers are less than optimistic about the outlook for 2026,” Challenger said.
That data clashes with the Bureau of Labor Statistics’ monthly wage report, which still paints a robust labor market picture.
Private reports are increasingly becoming early warning flags, signaling that cracks are forming before the official figures. Earlier this month, blockchain-based Truflation showed a sharp drop in real-time inflation to below 1%, even as the official CPI lingers well above the Fed’s 2% target.
Taken together, these unofficial indicators suggest that the Fed will soon need to ease policy by lowering borrowing costs to support the economy. The potential easing could bode well for assets like bitcoin, which is now down nearly 50% from a record high above $126,000.
The Fed this month left the benchmark interest rate unchanged in the 3.5%-3.75% range while dismissing concerns about inflation. Analysts’ forecasts of what it will do next are all over the place.
JPMorgan expects the Fed to keep interest rates unchanged throughout this year and then raise sometime in 2027, while other banks expect at least two 25 basis point rate cuts this year.
An economist who correctly predicted Japan’s fiscal issues expects Trump’s nominee for Fed chairman, Kevin Warsh, to cut interest rates by 100 basis points before the midterm elections in November.
