Summary
- The U.S. economy added 162,000 jobs in August, significantly surpassing the 53,000 jobs that economists anticipated, while the unemployment rate remained steady at 4.1%, as per the Bureau of Labor Statistics.
- Bitcoin retreated below the $80,000 mark after reaching a four-month peak of $82,240 earlier in the day, as futures tied to federal funds raised the likelihood of a September rate hike from 49.4% to 58%.
- The Dow Jones dropped by 226 points, and gold prices fell to $4,419 an ounce, following President Trump's call for lower interest rates on Truth Social shortly after the report was released.
The U.S. job market showed robust growth in August, with 162,000 new jobs added—almost three times the 53,000 projected by economists surveyed by Dow Jones, according to the BLS report published on Friday.
The unemployment rate held at 4.1%, aligning with expectations, and both the June and July job figures were revised upwards.
Myriad: What's next for the Fed in September? Share your prediction.Market participants interpreted this strong jobs report as a catalyst for a potential interest rate increase by the Federal Reserve. The Dow Jones Industrial Average fell by 226 points, or 0.4%, while the S&P 500 decreased by 0.2%, and the Nasdaq Composite saw a slight rise of 0.1%.
Traders in Fed funds futures are now pricing in a 58% probability of a rate hike during the Federal Reserve's meeting on September 15-16, up from 49.4% the previous day, according to the CME FedWatch tool. Treasury yields increased across the board, with the yield on the two-year note reaching its highest level since January 2025.
"A fantastic jobs number just released, exceeding all estimates," President Donald Trump stated on Truth Social on Friday. He reiterated his call for the Federal Reserve to lower interest rates and warned of trade halts with countries that maintain a surplus against the U.S. if they don't comply.
Gold also experienced a decline, dropping to a session low of $4,380 per ounce, marking a potential second consecutive weekly loss.
Cryptocurrency markets reacted similarly. After reaching a four-month high of $82,240 earlier on Friday, Bitcoin retraced more than 2% to around $79,300 shortly after the jobs report was released. The initial surge followed comments from Fed Governor Christopher Waller, who indicated he was "inclined to support" keeping rates unchanged.
Higher interest rates tend to make risk-free assets more appealing, thus requiring stocks and cryptocurrencies to deliver higher returns to justify their risk relative to U.S. Treasuries. Additionally, rising rates generally strengthen the dollar, which negatively impacts dollar-denominated assets like Bitcoin and gold. This explains the inverse relationship between the strong jobs report and the decline in Bitcoin's price.
This scenario contrasts with the aftermath of July's disappointing jobs report, which led to reduced expectations for rate hikes and allowed cryptocurrency prices to rise. Such a significant beat on job numbers diminishes the case for maintaining rates as Waller suggested just a day prior.
Bitcoin began September trading near $77,500, a month often referred to by crypto traders as Red September, due to the token's tendency to close lower in eight of the last thirteen Septembers. Friday's price action aligns with this historical trend, even following Thursday's short squeeze that eliminated over $415 million in bearish positions.
Current Crypto Market Overview
Overall, crypto market sentiment has cooled but remains in a bullish stance. The CoinMarketCap Fear and Greed Index registered at 75, still categorized as "greed," while the total cryptocurrency market capitalization hovered around $2.67 trillion, reflecting a slight increase of 0.11% for the day. However, it is important to note that bullish sentiment has declined from last week’s extreme greed levels.
Spot Bitcoin ETFs recorded net inflows of $730.8 million, continuing the positive buying trend that began with Thursday's optimistic outlook on rate pauses. CoinMarketCap's Altcoin Season Index remained at 38, still favoring Bitcoin over other cryptocurrencies.
Bitcoin ETF Net Flows. Image: DecryptThe Federal Reserve's decision on rates is set for September 15-16, marking the first hike under consideration since the tightening cycle that concluded in July 2023. The next jobs report, which will cover September payrolls, is scheduled for release on October 2.