The latest US labor number has dropped amid an already uneasy mood across global markets.
Initial jobless claims for the week ending October 18 came in at 232,000, a release pushed out of its normal schedule because of the recent government shutdown.
With several weeks of data still missing, even a simple update is enough to move sentiment, and this one has landed right as traders are already turning defensive.
A Soft Labour Signal
On paper, the rise in claims isn’t dramatic. Layoffs remain low, but hiring has slowed, pointing to a cooling labour market.
The shutdown, which ended on November 12th, has created what analysts are calling a data “black hole,” making it harder to judge the real momentum of the economy. The insured unemployment rate held steady at 1.3%, while the four-week moving average for claims stood at 58,000.
But with missing data and unclear trends, markets are treating any new information with extra caution.
Rate-Cut Expectations Slip
This is where the tension lies. A softening labour market usually supports the case for rate cuts. Fed Governor Christopher Waller even noted that weakening jobs and uptick in corporate discussions about layoffs could justify a December cut.
“It could be AI-related. It could be a lot of other things … It’s not just going to be ‘no hire, no fire.’ At some point this is going to start happening,” Waller said.
But the market isn’t fully buying it. The CME FedWatch tool now indicates a 46% chance of a 25-basis-point rate cut in December, a decrease from the 62% probability recorded just a week ago. Fed Vice Chair Philip Jefferson is warning policymakers to move slowly, adding to the uncertainty.
Major banks like Goldman Sachs, Barclays and Bank of America still believe delayed economic data could revive the case for a cut but traders are waiting for clearer signs.
Bitcoin Feels the Pressure as Risk Sentiment Drops
Crypto has been hit hard. Bitcoin has now erased its gains for 2025, dropping below $90,000 for the first time in seven months and falling more than 28% from its record high above $126,000. More than $600 billion in value has been wiped out.
The broader backdrop explains the move: fading hopes of a near-term Fed cut, thinner liquidity after the October 10 flash crash, and long-term holders locking in profits.
As OKX’s Haider Rafique said, “Bitcoin’s pullback is part of a broader shift in risk sentiment.”
What Traders Are Watching Next
Another jobless claims report arrives Thursday. If the data continues to show labour softness, the case for a December cut strengthens. If not, markets may stay cautious and crypto will remain sensitive to every macro headline.
For now, until the Fed’s path becomes clearer, volatility stays in charge.
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