The crypto market lost $60 billion in market capitalization during the two hours following revised employment data, revealing a significantly weaker US labor market than previously reported.
Despite partial recoveries from daily lows, all assets remained below their pre-announcement prices.
Bessent argued that the Fed maintained a restrictive monetary policy based on inflated employment figures. The market reaction reflected investor concerns that the Federal Reserve operated with incomplete data when setting interest rate policy throughout 2024.
The substantial employment overcount suggested the economy required more accommodative monetary conditions earlier than policymakers recognized.
The annual benchmark revision process compares Current Employment Statistics estimates against comprehensive employment counts from the Quarterly Census of Employment and Wages, which derives data from state unemployment insurance tax records filed by nearly all employers.
The 0.6% revision magnitude exceeds the 10-year absolute average of 0.2%, highlighting the scale of the employment overcount. The BLS attributed the discrepancy to businesses reporting lower employment to unemployment insurance records than to monthly employment surveys.
The correction indicated traders view the current landscape as uncertain, although the revised numbers raise the odds of a rate cut in September.
