The grim unemployment numbers had little impact on bitcoin, which was already in the doldrums, but stocks were sent tumbling.
Shutdown Jobs Report: The Official Numbers Are In, and They’re Ugly
When economists submitted their predictions for October and November unemployment, they expected bad news, and on Tuesday, jobs data published by the Bureau of Labor Statistics (BLS) lived up to the gloomy projections. November gained 64,000 jobs, significantly more than the 50,000 experts predicted, but October saw 105,000 job losses, and now, the unemployment rate has crept up to 4.6%, its highest level in four years. Stocks were in the red, but surprisingly, bitcoin, in another counterintuitive move, climbed 2.5%.
(November gained 64,000 jobs but October lost 105,000, according to Tuesday’s jobs report. / Bureau of Labor Statistics via The Guardian)
The recent U.S. government shutdown was the longest ever, and jobs data was not collected during the 43-day impasse. BLS was forced to release November employment figures one week late, but when it finally published the numbers, partial data from October was also included. Roughly 105,000 jobs were lost in October, mostly from the federal government, which lost 162,000 jobs that month, then bled another 6,000 in November. More than 150,000 government employees accepted job buyout offers from the Trump administration, which has been focused on shrinking its 2.25 million federal government civilian workforce.
The soft employment scenario has made it increasingly challenging for the Federal Reserve to fulfill its dual mandate of maintaining stable prices and full employment. Headline inflation is already at 3% as of September, a full percentage point above the Fed’s 2% target. But raising rates may worsen the already precarious employment situation, and cutting rates further may trigger runaway inflation. In fact, the probability of a January 2026 rate reduction has now dropped to only 24%. The three major stock indices all fell, but bitcoin remained unbothered, albeit 30% lower than its October record high.
“The November jobs number supports a 25-basis point rate cut, but the data is soft and slightly inaccurate because of the 43-day shutdown,” said finance commentator and Shark Tank investor Kevin O’Leary. “Inflation is still at 3.1%, though, and that puts the Fed in a very difficult position. Every rate cut from here will be heavily scrutinized and debated, and you’re already seeing dissent inside the Fed.”
