US employers added just 29,000 nonfarm payrolls in September, falling far short of the 90,000 jobs expected by economists and prompting an immediate price spike in Bitcoin and gold.
Labor Market Slows Sharply in September Report
Data released at 8:30 a.m. ET on Friday by the Bureau of Labor Statistics (BLS) revealed that the US unemployment rate rose to 4.2%, slightly above the forecast 4.1%. The September nonfarm payroll growth of 29,000 marks a significant drop from August, when employers added 162,000 jobs. The BLS noted that hiring changed little across every major industry sector.
According to the report, private payrolls grew by 46,000 against an estimated 81,000. Average hourly earnings increased 3.0% year-over-year compared to the 3.1% consensus projection, while the labor force participation rate reached 61.8% versus the expected 61.6%. The average workweek stood at 34.4 hours, marginally above the 34.3 estimate. The weak labor metrics come as US nonfarm payrolls were expected at 90K while traders weighed Federal Reserve monetary policy.
Bitcoin and Gold Jump as Short Positions Face Liquidations
Following the economic data release, gold rose from approximately $4,178 per ounce to $4,227 within minutes, according to TradingView data. Simultaneously, Bitcoin climbed from around $86,450 to nearly $87,230 before settling around $86,767, marking a 3.48% daily gain. The movement mirrored a similar reaction on Wednesday when a key US inflation measure cooled to 3.4%.
The sudden upside pressure triggered significant leverage liquidations. CoinGlass data shows that $32.51 million in leveraged crypto trades were liquidated within an hour of the report. Traders holding short positions suffered the vast majority of losses, with $27.53 million in short bets wiped out. Bitcoin positions accounted for $20.5 million of the total liquidations.
Federal Reserve Policy Context
The Federal Reserve raised interest rates in September, and 10-year Treasury yields hit a 24-year high earlier in the week. Despite the stalling employment figures, J.P. Morgan maintains its forecast for another interest rate hike in December.
Key Takeaways
- 29,000 nonfarm payrolls added in September versus 90,000 expected, with unemployment rising to 4.2%.
- Bitcoin touched $87,230 and gold reached $4,227 per ounce shortly after the 8:30 a.m. ET release.
- $27.53 million in short positions were liquidated in one hour, led by $20.5 million in Bitcoin trades.
- J.P. Morgan still projects one additional Fed interest rate hike in December.
Why It Matters
The dramatic miss in job growth highlights potential cracking in the US labor market despite ongoing inflation concerns. If employment momentum continues to stall, the Federal Reserve may face increasing market pressure to reconsider its tightening stance in future cycles. For non-yielding assets like Bitcoin and gold, signs of macroeconomic deceleration consistently act as immediate catalysts by driving demand toward alternative stores of value.
