The U.S. labor market blew past expectations in May, adding 172,000 nonfarm payrolls against a consensus forecast of just 88,000. The data, released Friday, all but extinguishes hopes for an imminent Federal Reserve rate cut and piles fresh pressure on crypto markets already buckling under ETF outflows and forced liquidations.
The jobs report in detail
Unemployment held at 4.3%, matching estimates. Job growth for March and April was revised up by a combined 93,000 – March got a +64,000 bump, April a +29,000 revision. Most new hiring came from leisure and hospitality, local government, and health care. Private payrolls rose 120,000 in May, also beating the 89,000 estimate.
Average hourly earnings ticked up 0.3% month-over-month and 3.4% year-over-year, both in line with expectations. The labor force participation rate stayed at 61.8%, and the average workweek was 34.3 hours.
Rate cut expectations fade
The strong headline number and upward revisions give the Fed little reason to ease soon. Before the report, markets were pricing in roughly a 50-50 chance of a cut by September. That probability has now dropped sharply. A tight labor market, especially with wage growth still above pre-pandemic norms, keeps the central bank in wait-and-see mode.
Crypto markets feel the heat
Digital assets were already under pressure. ETF outflows have been persistent, forced liquidations have piled up, and investor sentiment has soured. The jobs data removes what little hope remained for a near-term rate cut that could have boosted risky assets. For crypto, the macro headwind just got stronger.
The timing isn't great. This month had already seen a string of negative headlines – a hack here, a regulatory probe there – and now the macro picture is tightening again. The May payrolls report doesn't just disappoint bulls; it actively reinforces the higher-for-longer narrative that has weighed on every corner of the crypto market.
