Bitcoin surged back above the $87,000 level on Friday. The sudden price spike has been driven by a surprisingly weak U.S. jobs report. The latest macro data has put a significant dent in expectations for another Federal Reserve rate hike this month.

The flagship cryptocurrency jumped from roughly $86,000 to an intraday high near $87,250, CoinGecko data shows.

The U.S. economy added just 29,000 jobs in September. For comparison, analysts were expecting as many as 90,000 new positions. Meanwhile, the unemployment rate rose to 4.2% from 4.1%, which was also unexpected.

A cooling labor market is bullish for Bitcoin, given that it makes it more challenging for the Federal Reserve to justify further monetary tightening.

A major surprise

The Bureau of Labor Statistics initially reported that the economy had added 162,000 jobs in August. However, that figure has now been revised down to 133,000.

It turns out that the U.S. economy actually lost 10,000 positions that month in September following the latest revision. Revisions for July and August erased 60,000 previously reported jobs.

This means that the U.S. economy added an average of only about 51,000 jobs per month between July and September.

Healthcare remained one of the few sources of employment growth. Construction added another 11,000 jobs. Financial-sector employment, however, declined by 7,000.

Average hourly earnings increased just 3% from a year earlier. Cooling wage growth means lower inflationary pressure.

Rate hike expectations plunge

As reported by U.Today, the central bank raised its benchmark rate by 25 basis points in September to a target range of 3.75%-4.00%. This was the first increase in three years.

Another increase remained a meaningful possibility since the Fed is laser-focused on reaching the 2% inflation target. This was one of the main sources of selling pressure for Bitcoin.

However, futures markets now put the probability of an October hike below 20% after the latest report.

Still, the Fed is expected to announce another hike in December.

Fed-dated swaps also stopped fully pricing in another complete rate hike this year.

It remains to be seen whether Bitcoin will be able to convincingly surge above the $87,000 level.