Payrolls Up 73K, Fed Cut Bets Rise, Bitcoin Reacts

The U.S. economy added just 73,000 jobs in July, falling well short of the 110,000 forecast and signaling a sharp slowdown in the labor market. The report from the Bureau of Labor Statistics (BLS) also included massive downward revisions to the prior two months, cutting a combined 258,000 jobs from May and June’s initial figures.

The unemployment rate ticked up to 4.2% from 4.1% in June, matching estimates.

U.S. Jobs and Unemployment Charts. Source: Bureau of Labor Statistics (BLS)

Hiring Slows Across Key Sectors

The July data showed broad weakness in hiring. Private sector payrolls increased by 83,000, while government employment declined by 10,000. Healthcare and social assistance added 73,300 jobs, remaining the primary driver of job growth. Retail employment rose by 15,700, reversing declines in prior months. Meanwhile, leisure and hospitality posted a modest gain of 5,000 jobs.

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Manufacturing shed 11,000 positions, including 2,400 in the auto industry affected by tariffs. Administrative support agencies lost 19,800 jobs, with temporary positions down 4,400. Wholesale trade also contracted, cutting 7,800 roles. Over the past three months, private sector hiring has averaged 52,000 jobs per month, underscoring slowing momentum.

Wages and Workweek Edge Higher

Average hourly earnings rose by 0.3% in July and 3.9% year-over-year, slightly outpacing forecasts. The average workweek lengthened to 34.3 hours, up from 34.2 in June. Combined with higher wages, this pushed economywide pay growth to 5.3% year-over-year, its strongest pace since March 2024.

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The household survey, used to calculate unemployment, showed the number of employed workers falling by 260,000 in July. The labor force declined by 38,000, which helped limit the rise in the jobless rate.

Market Reacts, Fed Rate Cut Odds Jump

Markets responded sharply to the weaker-than-expected report. The S&P 500 fell 1.2% in morning trading, while Treasury yields dropped, with the 10-year at 4.3% and the 2-year at 3.81%. According to CME FedWatch data, the probability of a Federal Reserve rate cut at its September 17 meeting rose to 67%, up from 38% the previous day.

Economists noted that hiring slowed notably after the April tariff increase. Despite gains in healthcare and social assistance, other key industries weakened, indicating reduced labor market resilience. The BLS report and downward revisions highlight growing headwinds for employment and a shifting focus toward potential monetary policy easing.

Bitcoin Slips as Weak Jobs Data Fuels Rate Cut Bets

Bitcoin reacted mildly to the July U.S. jobs report, trading at $115,343 after briefly dipping to $113,900. The weaker-than-expected payroll growth and rising unemployment increased expectations of a Federal Reserve rate cut in September, initially supporting risk assets. However, BTC struggled to maintain upward momentum and stayed below its 50-period EMA at $117,560 on the 4-hour chart.

BTCUSD 4-Hour Chart. Source: TradingView

Selling pressure intensified as Bitcoin failed to reclaim the EMA, signaling caution among traders. The price action showed consolidation through late July, followed by a sharp drop after the labor data release. Lower employment figures raised concerns about broader economic weakness, which limited Bitcoin’s ability to break higher despite dovish rate cut bets.

If BTC holds above $114,000, it could attempt a rebound toward resistance at $117,500. A failure to defend this level may expose downside targets near $112,000, aligning with the July support zone. The market’s focus now turns to upcoming economic data and the Fed’s stance, both of which could influence Bitcoin’s next move.