America's employers added just 29,000 jobs in September, falling significantly short of the 90,000 jobs economists had anticipated, according to data released by the Bureau of Labor Statistics (BLS).
Alongside the weaker-than-expected nonfarm payrolls, the US unemployment rate rose to 4.2%, compared to an expected 4.1%. Meanwhile, the participation rate came in at 61.8%, and average hourly earnings grew 3.0% year-over-year. The BLS reported that hiring changed little across every major industry.
Bitcoin and Gold Rally on Weak Employment Data
Following the release of the jobs report, both gold and Bitcoin experienced sharp increases within minutes. Gold climbed from approximately $4,178 to $4,227 per ounce, while Bitcoin rose from about $86,450 to nearly $87,230. Live data later placed Bitcoin up 3.48% on the day at $86,767. This marked the second time in the week that both assets jumped rapidly, following a previous reaction to a cooling US inflation measure on Wednesday.
Liquidations Hit Bearish Traders
The sudden upward price movement resulted in substantial liquidations for traders betting against the market. CoinGlass data indicated that $32.51 million in leveraged bets were wiped out over the hour following the report, with about $27.53 million coming from traders betting that prices would fall. Bitcoin short positions accounted for $20.5 million of those losses.
Implications for Federal Reserve Policy
The Federal Reserve previously raised interest rates in September, an environment where higher rates typically make savings and bonds more appealing than non-yielding assets like gold and Bitcoin. J.P. Morgan continues to expect an additional rate hike in December, and 10-year Treasury yields recently reached a 24-year high. With the release of the September jobs data, the Federal Reserve now faces a stalling job market as it approaches its upcoming December policy decision.
