U.S. Job Market Signals Trigger Concerns Over Economic Stability

Red flags in the labor market are flashing—and Wall Street's getting nervous.

What's the real story?

Behind the headline numbers, cracks are forming. Hiring's slowing in key sectors. Wage growth is cooling faster than analysts predicted. The 'soft landing' narrative? It's looking shakier by the day.

Why this matters for your portfolio

Traditional markets hate uncertainty. When jobs data wobbles, it shakes confidence in consumer spending, corporate earnings, and the Fed's next move. It's the classic domino effect—and nobody knows which piece falls first.

The cynical take

Another day, another economic indicator for traders to overreact to. They'll panic-sell on the rumor, then FOMO-buy on the Fed's whisper—all while collecting fees, of course.

Bottom line: The data's turning. Whether it's a blip or a trend is the trillion-dollar question. Buckle up.

Due to the recent shutdown of the U.S. government, there has been a delay in the release of multiple reports, which now appear consecutively. Although these delayed reports offer a broader overview, Powell expresses doubts about the reliability of the numbers, as data collection during the shutdown was suboptimal. Let’s delve into what this influx of reports means for us.

Cryptocurrency Market Faces Decline

The unemployment rate reached its highest point since September 2021, standing at 4.6%, surpassing any projections made by Federal Reserve members for 2025 and underscoring the necessity of interest rate cuts. As Powell and his team hone in on inflation, the unemployment rate has persistently set new peaks, while inflation remains steady. The Federal Reserve has two primary mandates: achieving maximum employment and combating inflation. Since 2022, their focus has heavily leaned on inflation, causing employment concerns to emerge.

U.S. employment figures for August and September were collectively revised down by 33,000. Powell had anticipated this, and the new reports confirm that employment conditions were worse than initially reported, supporting further interest rate reductions. However, cryptocurrencies continue to fall rather than rise in this environment.

Factors such as the upcoming interest rate decision by Japan on Friday, waning interest during the year’s end, and the anticipated MSCI and Supreme Court Tariff Decision shock in January are undermining the risk appetite.

Onslaught of U.S. Economic Data

The Bureau of Labor Statistics reports that the response rate for November was 64%, indicating that the data is less reliable than pre-shutdown, but weakness in employment is evident. Following the employment and retail sales data, U.S. interest rate futures predict two rate cuts in 2026; a 58 basis point easing is priced for the coming year. The expectation for a rate cut in January increased from 22% to 33%.

For October, the Non-Farm Payroll expectation was -25K, but it came in at -105K. The August employment figures were revised from -4K to -26K. September’s unemployment numbers were adjusted down from 119,000 to 108,000. Non-Farm payrolls reached 64K in November, against a 50K expectation. The unemployment rate, against a 4.4% expectation, reached a new peak of 4.6%.

The decline in average earnings highlights the potential for further weakening in employment, and the below graph shows the swell in unemployment since March 2023.

Yet, with unemployment over 6% at the end of 2020, we continue to see some in the Fed believing they can maintain control over the current situation.

The above graph illustrates the five-year change in non-farm employment, with a clear decline in 2025. This data indicates that, barring extreme surprises, a rate cut in January might be on the table. However, these factors do not alleviate the unique pressures on cryptocurrencies, failing to buoy BTC, which remains below 87,000 dollars.