As the market generally expects the Federal Reserve to continue cutting interest rates in response to economic slowdown and cooling inflation, the U.S. labor market unexpectedly "exploded," bringing new variables to the Fed's monetary policy decision in December. On November 20, 2025, the U.S. Bureau of Labor Statistics (BLS) released the September non-farm payroll report, showing that the number of new jobs significantly exceeded expectations, reversing the losses recorded in August. This unexpectedly positive data immediately strengthened the position of the hawkish members of the Federal Open Market Committee (FOMC), causing the probability of a rate cut in December to plummet, and risk assets fell in response. The cryptocurrency market was hit hardest, with both Bitcoin and Ethereum declining sharply, causing a massive shock in the crypto market!
- Non-farm data unexpectedly "explodes": Strong rebound in the labor market
On Thursday (November 20), the U.S. Bureau of Labor Statistics (BLS) released the highly anticipated September non-farm payroll report, which showed that the U.S. economy added a significantly higher number of jobs than expected in September.
New jobs exceed expectations: This month, non-farm employment increased by 119,000, reversing the loss of 4,000 jobs recorded in August after revisions, far exceeding Dow Jones' market consensus expectation of 50,000 new jobs in September. Additionally, the July job additions were revised down to 72,000, a decrease of 7,000 from the previously reported figure.
Unemployment rate slightly rises: Besides the headline employment data, the BLS reported that the unemployment rate slightly rose to 4.4%, the highest level since October 2021.
Average hourly wage: The average hourly wage in September increased by 0.2% month-on-month and 3.8% year-on-year, both lower than the market forecasts of 0.3% and higher than 3.7%, respectively.
Ending the "data vacuum": This report ended a record 44-day "data vacuum" in the labor market caused by the government shutdown since early September. This is also the first employment report released by the BLS since the August employment data published on September 5.
- Changes in the Fed's December rate cut: Strengthened hawkish stance, market expectations adjusted
The unexpectedly positive non-farm data immediately had a significant impact on the Fed's monetary policy expectations.
Strengthened hawkish stance: The strong employment report will reinforce the position of the hawkish members of the FOMC, who have consistently warned that the Fed should not cut rates too quickly. Fed member Musalem stated that he expects the U.S. economy to rebound strongly early next year, highlighting the need for officials to be cautious about further rate cuts. He reiterated his view that the current Fed policy is close to a level that no longer exerts downward pressure on inflation and emphasized that there is limited room for further rate cuts; otherwise, monetary policy would become excessively loose. Fed Chair Powell also stated last month that a rate cut in December is not a foregone conclusion.
Probability of rate cut plummets: The market's probability of a 25 basis point rate cut by the Fed in December has dropped to 39.6%. Traders continue to bet that the Fed will keep rates unchanged at the meeting on December 9-10.
Divergence among officials: Fed officials have differing views on how much more rate cuts are needed. Fed member Hamak stated that the non-farm payroll report is "somewhat outdated" but meets expectations. The employment data appears to be mixed, highlighting the challenges facing monetary policy.
Bessent calls for rate cuts: U.S. Treasury Secretary Bessent stated that the Fed should pay attention to the data and continue its rate-cutting cycle.
- Cryptocurrency market shock: Bitcoin and Ethereum both decline
With changes in the Fed's rate cut expectations, demand for risk assets has been suppressed, leading to a decline in the cryptocurrency market.
Bitcoin and Ethereum decline: Bitcoin fell to a low of $86,100 at 3:00 AM this morning but has slightly rebounded to $87,200; Ethereum briefly fell below $2,800 and has now slightly rebounded to $2,850.
Downward driving forces: Recent large outflows from spot Bitcoin and Ethereum ETFs, along with the weak pullback in U.S. stocks, have become the driving forces behind the decline in the cryptocurrency market. Bitcoin often declines during U.S. stock market opening hours, followed by a rebound during the Asian trading session, highlighting the selling pressure from the U.S.
U.S. stocks hit: U.S. stocks closed lower on Thursday, with the Dow Jones down 0.84%, the S&P 500 down 1.55%, and the Nasdaq Composite down 2.15%. NVIDIA fell 3.1%.
- Highlights and concerns in employment data: Healthcare leads, transportation declines
The sources of job growth in September remain concentrated in familiar industry structures:
Highlights: The healthcare sector added 43,000 jobs, consistent with trends over the past year; bars and restaurants contributed 37,000; and the social assistance sector increased by 14,000.
Concerns: The transportation and warehousing sector decreased by 25,000; federal government departments reduced by 3,000, with a total annual decrease of 97,000, which had previously been an important source of job growth.
Household survey more optimistic: The household survey used to calculate the unemployment rate showed stronger employment signals: total employment increased by 251,000; the labor force grew by 470,000, reaching a record 171.2 million; and the labor force participation rate slightly rose to 62.4%, the highest since May.
- Fed's decision-making challenges: Data gaps and policy judgments
Due to the lack of regular economic indicators, Fed officials face more difficult policy judgments.
Meeting minutes: The minutes from the Fed's October meeting (released on Wednesday) showed that several officials emphasized the difficulty of making policy in the absence of data and expressed caution about further rate cuts in December.
Data recovery: With the release of the September non-farm data, the BLS is also preparing for future reports. The BLS announced on Wednesday that it will release employment data for October and November simultaneously on December 9. However, due to the inability to complete the household survey, the October data will not include the unemployment rate indicator.
Conclusion:
The unexpectedly "explosive" non-farm data and the strong rebound in the U.S. labor market have dramatically adjusted expectations for a Fed rate cut in December. This not only strengthens the position of the FOMC's hawkish members but also leads to declines in risk assets such as cryptocurrencies, with both Bitcoin and Ethereum falling sharply. In the context of the Fed's policy decision facing data gaps and increasing internal disagreements, global financial markets will remain highly sensitive. Investors should closely monitor the final decision of the Fed's December meeting and its impact on the global economy and cryptocurrency market.
Related reading: BlackRock's IBIT market value shrinks by $1.6 billion, is Wall Street's ETF demand retreating?
Original article: “Non-farm data unexpectedly exceeds expectations! Fed whisperer: December rate cut in doubt, U.S. stocks and Bitcoin (BTC) decline”
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