Rising US Unemployment Rate Expected to Lead to Rate Cut by Year-End? Bitcoin Surges Past $63K

The U.S. Department of Labor released the April non-farm payroll numbers yesterday, showing only an addition of 175,000 jobs, which was below analysts' expectations. The unemployment rate increased to 3.9%. The market reacted to this by anticipating a rate cut by the Federal Reserve by the end of the year. The Dow Jones index rose by 450 points yesterday, and Bitcoin surged past 63,000 yuan.

Non-Farm Payrolls Fall Below Expectations, Unemployment Rate Reaches 3.9%

The U.S. labor market is gradually slowing down. According to the Department of Labor's report released yesterday, the April non-farm payrolls only added 175,000 jobs, below analysts' expectations of 241,000 jobs. This figure marks the lowest since October 2023; the unemployment rate slightly increased from the previous month's 3.8% to 3.9%.

There is usually a negative correlation between the unemployment rate and future inflation. Therefore, the slowdown in the April job market seems to be anticipating the end of inflation, with the market expecting a rate cut later this year.

Fed Halts Rate Hikes

As expected by the market, the Federal Reserve of the United States maintained interest rates unchanged for the sixth consecutive time this week. Powell stated that although the inflation target has not been met, the next interest rate policy is unlikely to be another hike, leading to a generally optimistic market outlook.

Fed Keeps Rates Unchanged, Powell Says "Unlikely Next Step Is a Hike"

However, Powell also emphasized that assessments will be based on actual inflation conditions.

Bitcoin Breaks Through 63K

Benefiting from the above market news, the Dow Jones Industrial Average rose by 450 points, up 1.18%. The price of Bitcoin continued to rise from 59K to 63K earlier today, with a daily increase of about 7%, while Ethereum reached $3,100, with an increase of approximately 4.5%.