The recent revision by the U.S. Labor Department has sent shockwaves through the markets, as it cut payroll figures down by 911,000 jobs—the largest single adjustment in history. This substantial revision indicates a profound weakness in the labor market, prompting speculation about potential Federal Reserve rate cuts despite persistent inflation.
The revision, which reflects data for the 12 months ending in March 2025, revealed that an average of 76,000 jobs had been overstated each month. Notably, this adjustment surpasses the 2009 revision during the peak of the global financial crisis. The Bureau of Labor Statistics reported severe losses concentrated in consumer-driven sectors, including a staggering drop of 176,000 jobs in Leisure and Hospitality and 226,000 in Trade, Transportation, and Utilities. Overall, the total private hiring was overstated by 880,000 jobs, marking a scale of labor market weakness not witnessed since the Great Depression and the COVID-19 pandemic.
The trend of downward revisions appears alarming, with the U.S. having cut a total of 258,000 jobs from previous May and June reports. The most recent adjustment added another 27,000 jobs to that tally, leading to the largest two-month net revision in modern history outside of the exceptional year of 2020. With August also witnessing a modest gain of just 22,000 jobs, many experts feel that the upcoming Federal Reserve meeting will result in a rate cut.
Meanwhile, the reaction in the financial markets has been telling. Gold, a traditional safe-haven asset, has already surged by 40% this year, significantly outpacing the S&P 500 and yielding robust returns for gold miners. The deterioration in the labor market has fortified investor expectations that the Federal Reserve will need to take action, even as the core Consumer Price Index remains above 3% with economic growth hovering around 3%.
For Bitcoin, the implications could be even more significant, particularly as it navigates through expanded macro liquidity. Bitwise Strategist André Dragosch pointed out that even prior to any formal rate cuts, patterns in stablecoins suggest an expansive liquidity environment—a move that could bode well for Bitcoin’s price trajectory.
With expectations of a 25 basis point rate cut from the Federal Reserve in the coming days, this would be historic, occurring while inflation remains elevated and stocks reach record highs. The current macroeconomic signals suggest that the central bank is prioritizing labor market health over inflation concerns, adopting what many describe as a “dovish but cautious” stance.
Bitcoin’s price strategy might benefit from this environment, reminiscent of gold’s advance ahead of any policy changes. Analysts believe that the current conditions, combined with Bitcoin’s historical relationship to liquidity cycles, could generate strong momentum moving into Q4. Some forecasting models suggest target prices for Bitcoin could reach between $167,000 and $185,000 if past correlations hold true.
As investors weigh their options amid these developments, it’s crucial to note that all trading and investment decisions carry risks, and individual research is essential prior to making any moves in the market.
