The US economy has been flashing warning signs from credit markets for months, and now the labor market is starting to show significant cracks. This has implications not only for consumers and businesses but also for risk assets like Bitcoin.
Alternative data shows US layoffs are surging:
Job cuts tracked by MacroEdge jumped +70,609 MoM in October, to 154,559, the highest in at least 2 years.
Monthly job cuts have now exceeded 100,000 for the 5th time this year.
At the same time, layoff announcements compiled by… pic.twitter.com/zLRiMebfi5 — The Kobeissi Letter (@KobeissiLetter) November 28, 2025
Cracking Labor Market Has Consequences for Bitcoin #
As the labor market weakens, liquidity dries up, risk appetite declines, and Bitcoin, at least temporarily, becomes more vulnerable to sharp price movements.
At the same time, a deteriorating labor market could force the Federal Reserve to cut rates faster and more deeply, which would provide tailwinds for Bitcoin in the medium term. The impact therefore depends on the phase of the cycle: short-term pressure, but long-term potential support.
Labor Market Sends Clear Warning Signals #
Behind the scenes, the US labor market is weakening in a manner consistent with a late-cycle economic slowdown. Figures from various sources tell the same story.
- MacroEdge: Total layoffs rose to 155,000 in October, the highest in two years.
- Challenger, Gray & Christmas: Over 150,000 announced layoffs, the worst October in over twenty years.
- WARN data: More than 40,000 employees have been formally notified that their jobs are being eliminated.
- Total so far this year: 1.1 million announced layoffs and more than 650 major corporate bankruptcies.
This is not a one-off event or a weak sector, but a clear cluster of weakness. The labor market, the last part of the economy that was still considered strong, is now showing the same signals as the credit markets, margins, defaults, and bankruptcies.
This is the moment when the “spreadsheet version” of the economy (profits, debts, margins) finally becomes visible in the human version (jobs, incomes, uncertainty).
Why Now? The Buffers Are Gone #
For the past two years, the economy seemed stronger than the underlying data suggested. This was because both households and businesses could lean on buffers:
- pandemic savings,
- cheap mortgages,
- extremely low previous interest costs,
- high nominal revenues due to inflation.
Those buffers are now gone.
Households: The First Cracks #
The pressure is visible in several categories:
- Serious auto loan delinquencies are at their highest level since 2010.
- Credit card delinquencies are approaching financial crisis levels.
- Rapid rise in student loan defaults now that repayments have resumed.
- Record levels of delinquencies in commercial real estate, especially offices.
Households now have to choose which bills to pay and which not to. This is typical behavior for an economy where the financial slack has disappeared. In that regard, a very exciting period is ahead for the Bitcoin price.
If the US economy holds up, things could still turn out fine. If it doesn’t, a bear market is almost inevitable.