Just-In: US Labor Shock Raises Rate Cut Bets, Bitcoin Still Down

US employers announced a sharp rise in job cuts in October, adding new pressure on the Federal Reserve ahead of its December policy meeting on rates. It was the highest total for any October since 2003.

Layoffs Surge Boosts Expectations For December Fed Rate Cut

Challenger Gray reported 153,074 layoffs, up 183% from September and 175% from the same month last year. It was the largest number of fourth-quarter cuts since 2008. Total job losses for the year have reached 1.1 million, the most since the COVID-19 outbreak in 2020.

The rise in job cuts also renewed debate about how deep the economic slowdown may become. Many companies cited cost reductions and AI efficiency gains as major drivers of workforce reductions. Economists said this trend may continue into early next year as firms adjust to rising expenses and slower revenue growth.

The data triggered immediate reactions across markets. Analysts at the Kobeissi Letter hint that the labor shock increases the chances of a rate cut at the next Fed meeting.

Rate Cut Bets Rise, But Bitcoin Shows Limited Reaction

On prediction market Kalshi, the probability of a 25-basis-point cut rose to nearly 70%. The odds of the Fed holding rates fell toward 30%. Traders said the weak labor report strengthens expectations that economic conditions are slowing faster than policymakers anticipated.

This shift contrasts recent warnings from Fed Chair Jerome Powell. Powell signaled cautious expectations about December cuts.

Some market commentators disagreed on how much rate cuts could help. Scott Melker said monetary policy cannot fix structural changes caused by cost-cutting and accelerating adoption of artificial intelligence.

He argued that the labor market is adjusting to new technologies that reduce the need for human workers. Melker further said this shift may continue regardless of what the Fed does. However, Bitcoin struggled to gain momentum despite the higher odds of easing.

Bitcoin Struggles Near Support As Market Caution Persists

BTC price hovered near $102,800 after a volatile trading session, according to TradingView. The drop extended a broader decline that has weighed on the market for several weeks.

The chart showed repeated failed attempts to break above short-term resistance near $103,500. Traders said the market remains cautious as liquidity conditions stay tight and risk appetite weakens.

Some analysts also warned that Bitcoin may revisit the CME gap at $92,000. The sharp rise in outflows from ETFs add pressure to the current downtrend.

Bitcoin could benefit once the Fed clearly signals a shift toward easing. It is historically known that crypto assets tend to recover once there is a policy pivot.