The latest U.S. labor market report showed a notable slowdown in hiring during June. The economy added just 57,000 jobs, well below the market expectation of 110,000. The weak reading followed an upward revision of May payrolls to 129,000 and reinforced signs of cooling economic momentum. Although the unemployment rate declined to 4.2%, the drop was largely driven by a fall in the labor force participation rate to 61.5%.
Fed expectations begin to shift The disappointing employment report prompted investors to reassess the Federal Reserve's policy outlook. Market participants increasingly expect the central bank to adopt a less restrictive stance if labor market weakness persists. According to CME FedWatch data, the probability of another rate hike by September fell from 65% to 50% following the release.
Risk assets reacted positively to the data. Bitcoin (BTC) gained around 4% over the past 24 hours and moved above 61,000 dollars, while Nasdaq 100 futures also advanced. Although elevated energy prices and inflation remain important risks, the weaker labor market data has reshaped expectations for the Fed's next policy decisions.
