The October US labor market report delivered an unpleasant surprise to the markets: instead of the expected 59,000–65,000 new jobs, the economy created 165,000 — nearly three times the consensus forecast. The reaction was immediate: gold and bitcoin dipped while the dollar strengthened, as traders revised the probability of a Fed rate hike at the December meeting.
The unemployment rate fell to 4.1% versus a forecast of 4.2%. Data for previous months were also revised upward: an additional 84,000 jobs appeared for August and September, and the average employment gain over three months reached about 137,000. Wages grew faster than expected — average hourly earnings rose 0.4% for the month and 3.1% year-over-year versus forecasts of 0.3% and 2.9% respectively.
How gold, bitcoin and the dollar reacted
Gold suffered the most: in the first minutes after the report was published at 8:30 a.m. Eastern Time, the price fell to $4,032 per ounce, although shortly before it had held at $4,062. Later the price returned to $4,050, but the overall picture remains weak — the metal has already lost about 31% from its peak value.
Bitcoin showed sharp fluctuations: first a rise above $76,100, then a decline to $75,600, after which the price stabilized around $75,780 on Binance — roughly 0.2% below the level before the data release.
The US Dollar Index (DXY), which reflects the dollar's exchange rate against six major currencies, jumped to 102.22 and then settled near 102.14, whereas before the report it stood at 102.07. The stock market opened at 9:30 a.m. without additional shock: the Nasdaq Composite had previously plunged 5.52%, entering correction territory, and the S&P 500 closed at 7,353.73.
Why strong employment weighs on gold and bitcoin
Job growth gives the Federal Reserve reason to raise rates, which typically strengthens the dollar and weighs on non-yielding instruments — gold and bitcoin. According to CME FedWatch data, before the report traders estimated the probability of a rate hike at the December 8–9 meeting at 67%; after the data release the estimate rose to 76.8%.
The Fed raised rates in September for the first time in three years, then left the 3.75–4.00% range unchanged on October 28. After weak September data (a gain of 29,000), the probability of a rate hike by December still rose — from 42% to 73% over the month.
Some experts believe the bar for a rate hike is higher: for a powerful bond selloff, according to MUFG estimates, a job gain of about 200,000 and a decline in the unemployment rate are needed. The October gain of 165,000 came in below that mark.
What gold and bitcoin holders should expect before December 9
At the December meeting the Fed will present updated rate projections. They will show whether officials expect another hike or are set on a prolonged tightening cycle. Such a scenario will determine borrowing costs for Americans and the dollar exchange rate, to which gold and bitcoin are tied.
Cryptalist analysis: The market has effectively repriced the Fed rate trajectory in real time: the jump in the probability of a December hike to 76.8% reflects the dominance of macroeconomic data over risk-on narratives. As long as dollar yields rise, gold and bitcoin remain hostage to monetary policy, and the latter's stability around $75,800 speaks more of a fragile equilibrium than of a formed bottom. The key trigger for both assets will be the December meeting and the updated dot plot.