US Employment Market Picks Up Steam in December, Unemployment Rate Unexpectedly Dips

The employment market in the U.S. picked up steam in December, with job growth topping economist forecasts by a mile and the unemployment rate unexpectedly dipping.

U.S. employment growth surpassed expectations in December, while the unemployment rate fell unexpectedly.

According to data released by the Bureau of Labor Statistics on Friday, the economy added 256,000 jobs last month, exceeding forecasts of 160,000 and outpacing the revised figure of 212,000 for November (originally reported as 227,000).

Meanwhile, the unemployment rate dropped to 4.1% in December, compared to expectations of 4.2% and November's 4.2% reading.

Following the announcement, bitcoin (BTC) briefly fell by over 2% to $92,800, attempting to recover from substantial declines earlier this week.

These employment market readings follow several economic reports that led to broad-based declines across asset classes, as investors rapidly scaled back expectations for a series of Federal Reserve rate cuts in 2025.

Crypto markets, which had been soaring to new highs, bore the brunt of the selloff, with bitcoin dropping from nearly $103,000 on Monday to below $92,000 at one point on Thursday. Major altcoins experienced even steeper percentage declines.

In traditional markets, U.S. stock index futures showed a decline of roughly 1% following the employment figures. The strongest reaction was observed in the bond market, where the 10-year Treasury yield rose by nine basis points to 4.78%. The dollar index also surged, rising by 0.6%. Gold, on the other hand, showed a slight decrease, trading just below $2,700 per ounce.

According to CME FedWatch, traders are quickly reducing their bets on further Fed rate cuts in 2025, with the odds of a March move falling to 28% from 41% just before the report. The chances of a May rate cut have also declined to 34% from 44% prior.

In other details from the closely watched report, average hourly earnings increased by 0.3% in December, meeting forecasts and slowing down from November's 0.4% increase. On a year-over-year basis, average hourly earnings rose by 3.9%, lower than the expected 4% and November's 4% reading.