US Jobless Claims Defy Expectations, Complicate Rate Cut Bets

The US labor market is defying expectations of a slowing economy, as initial jobless claims remain below 200,000 for the third consecutive week. According to the Labor Department, claims came in at 199,000 for the week ending August 1, marking a historically low figure.

The four-week moving average has fallen to its weakest level since September 2022, when the Federal Reserve was still in the midst of its most aggressive rate-hiking cycle. Economists and Fed watchers have treated the 200,000 mark as a dividing line between a cooling labor market and a resilient one.

The strong jobs numbers are complicating bets for a Federal Reserve rate cut, which could strengthen the US dollar and create headwinds for Bitcoin and other assets priced in US dollars. A stronger dollar historically raises the opportunity cost of holding non-yielding assets like Bitcoin.