02.08.2025 03:12

July's employment figures reveal a significant slowdown in US job market growth, a trend also observed in May and June. The Bureau of Labor Statistics reported a mere 73,000 increase in nonfarm payrolls, considerably lower than the anticipated 110,000 and significantly weaker than the initially reported figures for the preceding months. These underwhelming numbers, coupled with downward revisions of previous months’ data (June's 147,000 to 14,000 and May's 144,000 to 19,000), paint a picture of sluggish hiring, averaging a mere 35,000 jobs per month over the past three months – the weakest pace since the onset of the 2020 Covid-19 pandemic.

The unemployment rate, while remaining at 4.2%, mirrors this deceleration, defying initial expectations and contrasting with the 4.1% figure recorded in June. This subdued job growth fuels speculation regarding potential Federal Reserve rate cuts, a prospect previously considered more likely. Interestingly, despite the overall market negativity reflected in overnight losses, the price of Bitcoin experienced a modest increase following the report’s release. However, the financial markets reacted more dramatically to the news; Treasury yields decreased, and the US dollar weakened against both the euro and the yen.

Despite the Federal Reserve's recent decision to maintain its benchmark interest rate range at 4.25-4.50%, Chairman Jerome Powell's hawkish stance following the meeting had already cast doubt on expectations of an imminent rate reduction. Market predictions for a September rate cut have fluctuated considerably. While initially dropping to 40% from a previous 75%, the probability has since rebounded to around 55% in response to today's data. The weak employment figures are likely to undermine Powell's previously expressed hawkish sentiment and could potentially influence the Federal Reserve's future monetary policy decisions.