Economist says weak jobs report may not reflect true labor market conditions
RSM chief economist Joe Brusuelas said investors and the Federal Reserve should avoid overreacting to the latest weak employment figures, arguing that seasonal adjustments at the Bureau of Labor Statistics likely distorted the headline number.
He pointed to a sharp decline in leisure and hospitality employment, suggesting the drop may have been linked to the end of World Cup-related activity rather than a broader deterioration in hiring.
Brusuelas said the report is unlikely to significantly influence Fed policy decisions and that markets should instead pay closer attention to next week’s inflation data for a better assessment of economic trends.
U.S. economy unexpectedly shed jobs in July
The U.S. labor market weakened for a second consecutive month in July, potentially giving the Federal Reserve more flexibility to maintain interest rates despite persistent inflation pressures.
The Labor Department’s latest Nonfarm Payrolls report showed that employers cut 23,000 jobs last month, missing forecasts for an increase of 80,000 positions. The figure was also weaker than June’s revised gain of 20,000 jobs, which was previously reported as a 57,000 increase.
Employment growth in May was also revised lower, falling to 63,000 jobs from the earlier estimate of 129,000.
The last monthly decline in payrolls occurred in February, when the economy lost 156,000 jobs.
The unemployment rate unexpectedly improved to 4.1%, compared with forecasts of 4.2% and June’s reading of 4.2%.
Markets reacted quickly after the release, with U.S. stock futures rising and Treasury yields declining. Precious metals also benefited, with gold gaining around 3% and silver climbing nearly 6%. Bitcoin showed little reaction, trading slightly higher near $65,000.
Wage growth also came in below expectations. Average hourly earnings increased just 0.1% in July, below the expected 0.3% rise and June’s 0.3% increase. Annual wage growth slowed to 3.2%, compared with forecasts of 3.5% and June’s 3.4%.
Before the jobs data was released, traders were split on whether the Federal Reserve would raise rates at its September meeting. CME FedWatch data showed markets had priced in a 55% chance of a rate hike, but that probability declined to 46% after the weaker report.
Bank of America says investor optimism is near extreme levels
Bank of America’s bull-and-bear sentiment indicator has climbed to its highest level since 2021, when pandemic-era stimulus fueled strong market enthusiasm.
The bank’s analysts, led by Michael Hartnett, advised investors to reduce exposure to riskier assets and consider more defensive investments, longer-duration assets, and the U.S. dollar as the indicator reached 9.7 from 9.4, close to its maximum level of 10.
However, crypto markets have not experienced the same surge in optimism seen in 2021. While traditional markets continue reaching new highs, Bitcoin and other digital assets remain under pressure and below previous peaks.
Bitcoin miners transfer more than $37 million in BTC to NYDIG
Bitcoin mining companies moved over $37 million worth of BTC to NYDIG, a transaction that could potentially indicate preparations for selling.
However, because NYDIG also provides custody and financing services, the transfers do not necessarily mean miners are preparing to liquidate their holdings.
Blockchain data from Lookonchain showed that MARA Holdings transferred 200 BTC worth about $12.86 million, while Riot Platforms moved 381 BTC valued at approximately $24.51 million to NYDIG.
MetaMask rolls out AI-powered crypto wallet
MetaMask has introduced its Agent Wallet, a new product that allows users to deploy AI agents to manage crypto activities such as market monitoring, swaps, and on-chain transactions.
The wallet enables users to connect AI coding and automation tools, including Claude Code, Codex, and Cursor, while setting spending limits and controlling which protocols agents can interact with.
Users can select between a safer Guard Mode or a more flexible Beast Mode depending on their preferred level of automation.
The wallet supports HyperLiquid and several Ethereum-compatible networks. MetaMask said it also includes transaction simulations, security checks, and MEV protection features before trades are executed.
Gold and silver extend gains as investors rotate from AI stocks
Precious metals continued their rally on Friday, with gold rising another 1% to around $4,300 per ounce and silver climbing above $64 after gaining more than 4% in 24 hours.
The strength in metals comes as investors appear to be shifting away from AI-related equities and toward traditional safe-haven assets amid concerns about the pace of AI-driven market growth.
Fidelity strategist warns rising bond yields could hurt markets
Fidelity’s global macro director Jurrien Timmer warned that rising U.S. 10-year Treasury yields above 4.5% could create pressure across financial markets.
Timmer said the 10-year yield had moved into a concerning range at 4.73%, noting that past market cycles have shown elevated long-term yields can create stress for investors.
He said the increase could be driven by several factors, including strong financing demand from AI companies, doubts about the Federal Reserve’s willingness to maintain its hawkish stance, and increased uncertainty caused by reduced policy transparency.
Higher yields typically create headwinds for risk assets, including technology stocks and cryptocurrencies.
Bitcoin remains near $64,350 ahead of employment data
Bitcoin traded around $64,350 on Friday, staying mostly flat for the week as investors waited for the latest U.S. jobs report. Ether remained near $1,903, while other major cryptocurrencies showed limited movement.
Market sentiment weakened slightly after oil prices moved higher following renewed geopolitical concerns involving Iran and shipping activity near the Strait of Hormuz.
Rising crude prices could increase inflation concerns, potentially encouraging the Federal Reserve to maintain tighter monetary policy. Treasury yields moved higher, while the U.S. dollar posted its strongest daily performance in two weeks.
For Bitcoin, the key factor remains the broader macro environment. A weaker labor report could support expectations of Fed rate cuts and improve risk appetite, while stronger economic data combined with rising oil prices could reinforce a more restrictive policy outlook.
