The U.S. labor market is cooling rapidly, a blow that could force the Federal Reserve to loosen its purse strings and potentially impose a floor under the price of bitcoin. .
Planned layoffs, or job cuts that companies have announced but not yet executed, jumped 205% to 108,435 in January, according to data tracked by global outplacement firm Challenger, Gray & Christmas. This is the highest figure since January 2009, months after the collapse of Lehman Brothers and the global economy plunged into recession.
Year over year, announced reductions increased by 118%, indicating a clear weakening of the labor market during the first year of Donald Trump’s second term as president. The technology sector announced 22,291 reductions, with Amazon (AMZN) accounting for the majority, while United Parcel Service (UPS) announced 31,243 planned reductions.
Andy Challenger, workplace expert at Challenger, Gray & Christmas, called the figure a high January, in any case a low-season month for hiring.
“This means that most of these plans were set at the end of 2025, indicating that employers are not very optimistic about the outlook for 2026,” Challenger said.
This data is at odds with the monthly payroll report from the Bureau of Labor Statistics, which still paints a resilient picture of the labor market.
Private reports are increasingly becoming red flags, signaling cracks forming in the face of official figures. Earlier this month, blockchain-based Truflation showed a sharp fall in real-time inflation, to less than 1%, even as the official CPI remains well above the Fed’s 2% target.
Together, these unofficial indicators suggest that the Fed may soon need to ease policy by lowering borrowing costs to support the economy. The potential easing could bode well for assets like bitcoin, which is now down nearly 50% from its all-time high of more than $126,000.
The Fed this month left its benchmark borrowing rate unchanged in a range of 3.5% to 3.75%, while signaling concerns about inflation. Analyst projections of what he will do next are everywhere.
JPMorgan expects the Fed to keep rates unchanged through this year and then raise them sometime in 2027, while other banks expect at least two 25 basis point rate cuts this year.
An economist who correctly predicted Japan’s fiscal problems expects Trump’s nominee for Fed chairman, Kevin Warsh, to cut rates by 100 basis points before the November midterm elections.
