A recent revision of U.S. benchmark payrolls has revealed a staggering downward adjustment of 911,000 jobs for the one-year period ending March 2025, marking the largest revision on record. This significant downward adjustment indicates that the labor market’s strength was much weaker than previously indicated by the government’s monthly Nonfarm Payrolls reports, which are critical for capital allocation decisions amounting to billions, as well as influencing Federal Reserve monetary policy.
Had this revised data been available earlier, it is plausible that the Federal Reserve would have taken a more aggressive approach in trimming interest rates throughout 2025. Currently, the central bank is widely anticipated to cut rates for the first time this year in an upcoming meeting. The latest revision could bolster expectations for a more substantial cut of 50 basis points, rather than the previously forecasted 25 basis points.
In reaction to the labor market news, trading in rate-sensitive assets reflected a familiar trend known as “buy the rumor, sell the news.” Prior to the release of the report, gold futures had surged past $3,700 for the first time in history, leading spot gold to reach an all-time high above $3,670. However, following the release of the data, gold futures quickly erased their morning gains, stabilizing around $3,679 by the end of the trading day.
Cryptocurrency also mirrored this behavior, as Bitcoin, which had climbed to approximately $113,000, fell to around $111,600, marking a 1% decline over the past 24 hours. Meanwhile, the U.S. 10-year Treasury yields, which were on the brink of dipping below 4% for the first time since February, instead rose to 4.07%. This fluctuation signals a broader response from financial markets to the newly disclosed labor market data, reflecting uncertainty and caution among traders and investors.
