May jobs: 172,000 hires lift rates, push down Bitcoin

The US economy added 172,000 jobs in May and the unemployment rate held at 4.3%. March and April payrolls were revised up by a combined 93,000, leaving the spring hiring trend firmer than earlier estimates.

The Bureau of Labor Statistics’ nonfarm payrolls measure showed most May gains in leisure and hospitality, local government and health care. Farm employment is excluded from the series because it is seasonal and often not captured on employer payrolls.

The government raised April payrolls by 64,000 to 179,000 and March by 29,000 to 214,000. The initial monthly estimates are updated as more employer responses arrive.

A stronger jobs picture reduces the Federal Reserve’s room to cut interest rates. April’s consumer price index rose 3.8% year over year, the highest since May 2023, with energy prices a major factor after geopolitical tensions pushed oil higher. Fed Governor Christopher Waller called talk of rate cuts “crazy.”

Bond traders have shifted toward pricing a possible rate increase by year-end. Expectations that policy will remain higher for longer are keeping mortgage rates elevated, making refinancing more costly and leaving credit-card and auto loan interest higher.

Bitcoin fell about 17% on the week and traded near $60,000. The cryptocurrency remains more than 50% below its October all-time high near $126,200. Record ETF outflows and a rotation of large investors into AI-related stocks reduced a steady source of buying, market participants say.

Fabian Dori, chief investment officer at Sygnum Bank, described the May payrolls as “the least comfortable outcome for anyone hoping for rate relief” and urged investors to “watch the repricing rather than the headline.” He noted that potential changes to bank capital rules and the level of Treasury cash at the Federal Reserve could still affect liquidity conditions.

The jobs report arrives ahead of the Federal Reserve’s June 16-17 meeting. The combination of persistent hiring, elevated inflation readings and cautious Fed comments lengthened the period in which borrowing costs are likely to remain high.