U.S. Employment Market Update

Solid strength in the U.S. employment market continued in February, though the unemployment rate ticked higher.

Nonfarm payrolls rose by 151,000 last month, according to the Bureau of Labor Statistics report released Friday morning. Economist forecasts anticipated a gain of 160,000. January payroll growth was revised lower to 125,000 from the originally reported 143,000.

The February unemployment rate was 4.1%, against expectations of 4.0% and January’s rate of 4.0%.

Bitcoin (BTC) experienced significant price swings — mostly downward — in recent weeks, influenced by tariff threats, stock market declines, and the confirmation of a U.S. strategic reserve. It remained just below the $90,000 level shortly after this labor news.

Due to recent macroeconomic jitters, market participants, previously dismissive of further rate cuts in 2025, now see about a 50% chance of a Fed rate cut by May and nearly 90% by June.

Additionally, a report from Challenger showed that U.S.-based employers announced 172,000 job cuts last month, the highest since July 2020, likely due to layoffs from the efforts of the Elon Musk-led Department of Government Efficiency (DOGE). Meanwhile, the Federal Reserve Bank of Atlanta’s GDPNow model forecasts a 2.4% contraction in the U.S. economy for Q1 2025, contrasting sharply with analyst estimates of over 2% growth.

An economic slowdown could challenge the Fed, as it may need to ease monetary policy to support growth while inflation remains stubbornly high, with a year-over-year headline rate of 3% and a core rate of 3.3%.