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- Bitcoin traders face a short U.S. trading week with key labor market data that could shift Fed policy and liquidity.
- JOLTS, ADP, jobless claims, and the employment report will shape investor sentiment and crypto price action.
The U.S. Labor Day holiday cuts down the trading week, but investors are looking at a crucial set of economic reports and an uncertain Federal Reserve. For Bitcoin (BTC) and the crypto market at large, labor market signals will hold sway over liquidity expectations and near-term price action.
JOLTS and ADP Data in Focus
The week starts off with the Job Openings and Labor Turnover Survey (JOLTS) scheduled for Wednesday. June saw 7.4 million openings, which was down from 7.8 million in May. Economists forecast July to be steady at 7.4 million.
This stability would help promote a “higher longer” Fed policy, which would support the dollar, and liquidity would be tight. Such an environment usually pushes Bitcoin unless opposed by other macro catalysts.
Thursday will give a more comprehensive measure with the ADP private payrolls report. The July print was 104,000, which is higher than anticipated, although the economists only projected 75,000 new private jobs in August. Softer hiring data would undermine the dollar and loosen yields, which are conducive to risk assets, including crypto. However, the sudden decline in the labor market may cause a recession panic, leading to temporary instability with liquidity expectations holding longer.
Jobless Claims and Unemployment Trends
Thursday also sees the weekly release of jobless claims. The number of claims was 229,000 in the week ending August 23, and economists have estimated that this will increase to 231,000. The increased claims provide a softer labor demand, which might drive the Fed into a more accommodative position. That result usually favors Bitcoin as a liquidity-sensitive asset. However, market response can be held down when perceived to be short-lived.
The employment report on Friday is the focus. The predictions for 75,000 new jobs are slightly higher than the 73,000 last month. The unemployment rate is projected to improve slightly from 4.2 to 4.3. A small employment and unemployment growth improvement implies strength and weakness, respectively. Investors would perceive such results as neutral-to-dovish and bolster the anticipation of September rate cuts.
Checking an ‘Unusual’ Labor Market
The month of July turned the tide of U.S. employment. The economy only added 73,000 jobs, and revisions wiped out over 250,000 gains reported in May and June. After the data, President Trump fired Erika McEntarfer as commissioner of the Bureau of Labor Statistics. The reshuffle cast doubt on the reliability of data and the labor market’s health.
At the Jackson Hole Symposium on August 22, Federal Reserve Chair Jerome Powell discussed these issues. He characterized the labor market as having a peculiar balance, with slowing supply and demand. Powell cautioned that the downside risk may become a reality within a short period in terms of increased layoffs and unemployment. His statements represented a possible move towards interest rate reduction, which his colleagues already advocated at the September 16 policy meeting.
Fed Politics Add Another Layer
Beyond the data, political developments at the central bank add uncertainty. Trump has tried to oust Fed Governor Lisa Cook; the case has gotten stuck in legal limbo in a court hearing that left her job undecided.
Meanwhile, the Senate Banking Committee will conduct a confirmation hearing on Thursday of Stephen Miran, who has been nominated to replace Adriana Kugler. With its approval, Miran would prefer more aggressive rate cuts.
