The U.S. job market showed significant signs of cooling in July, with the economy adding just 114,000 jobs and the unemployment rate climbing to 4.3%, according to the Bureau of Labor Statistics. This job growth figure fell short of expectations for 175,000 and was a notable decrease from June’s revised figure of 179,000, initially reported as 206,000.

The unemployment rate’s rise from 4.1% in June to 4.3% was also above the forecast of 4.1%. Despite this soft data, the price of bitcoin (BTC) remained relatively unaffected, trading at around $64,500, showing little change from its position before the announcement and from 24 hours earlier.

 

In contrast, traditional markets saw a more pronounced reaction. The yield on the 10-year Treasury fell by 15 basis points to 3.83%, and the two-year yield dropped by 23 basis points to 3.93% – both reaching their lowest levels in over a year. Stock markets did not respond favorably to the job numbers, with Nasdaq futures falling 2.3% and the S&P 500 down by 1.6%.

The dollar weakened by 0.6%, while gold prices surged by 1.3%, hitting a new record high of $2,513 per ounce.

Other aspects of the employment report showed that average hourly earnings increased by 0.2% in July, falling short of the expected 0.3% and down from 0.3% in June. Annually, average hourly earnings rose by 3.6%, which was below the 3.7% forecast and June’s 3.8% increase. Average weekly hours worked also missed expectations, coming in at 34.2 against forecasts of 34.3 and June’s 34.3.

In response to the weaker-than-expected job data, traders are increasingly betting on significant Federal Reserve rate cuts in the coming months. The CME FedWatch tool now indicates a 70% chance of a 50 basis point rate cut in September, up from 22% just a day earlier. For the December meeting, traders are beginning to price in a total of 125 basis points in rate cuts by the end of the year, compared to the previous expectation of 75 basis points.

This shift in market sentiment underscores the broader economic uncertainty and the increasing likelihood of more aggressive monetary easing by the Federal Reserve to support the economy.