The crypto market has yet to show any signs of recovery, especially with Bitcoin (BTC) continuing its downward trend for the past three weeks. Historically, BTC prices have always performed poorly in September. So how is BTC performing this September? Read the analysis below.
The Pintu trading team has gathered critical information and analyzed the general economic situation and the crypto market’s movements over the past week. However, it should be noted that all information in this Market Analysis is intended for educational purposes, not as financial advice.
According to the latest data released by the Bureau of Labor Statistics last Tuesday, the number of job openings in the United States fell for the third consecutive month, dropping below 9 million for the first time since early 2021. In addition, fewer workers are choosing to quit their jobs, fewer companies are hiring, and layoffs have increased slightly. This indicates a shift toward more stable and balanced conditions in the U.S. labor market.
According to the BLS’s Job Openings and Labor Turnover Survey (JOLTS), job openings fell to a seasonally adjusted 8.827 million in July, down from 9.165 million in June and below the expected 9.465 million. This is the smallest total number of job openings since March 2021, resulting in a ratio of 1.5 job openings per unemployed person.
The U.S. jobs data was well received by the Federal Reserve, which continues to seek a tighter labor market to combat inflation. Inflationary pressures can arise from an imbalance between the supply and demand for labor, which can lead to wage increases. To curb rising prices, the central bank has even raised interest rates to dampen demand.
The slowing momentum in the labor market is also evident in the weaker-than-expected growth in U.S. private payrolls. According to the ADP National Employment Report released on Wednesday, private payrolls increased by 177,000 positions last month. This figure falls short of the 195,000 new jobs economists had forecast. However, revised data for July paints a more positive picture, showing an increase of 371,000 jobs, higher than the previously reported 324,000.
In addition, job openings reached a two-and-a-half-year low in July, indicating that the labor market remains tight. Faced with recruiting challenges amid the COVID-19 pandemic, most employers are opting to retain their existing workforce.
A separate report from the Labor Department on Thursday showed that initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 228,000 for the week ended August 26. Economists had forecast 235,000 claims for last week.
The four-week moving average for claims, which smooths out some of the weekly fluctuations, increased by 250 to 237,500. Initial claims are considered a proxy for the number of layoffs that occurred in a given week.
Continuing jobless claims rose by 28,000 to 1.73 million, above the prior estimate of 1.71 million.
Inflation in the U.S., as measured by the Personal Consumption Expenditures (PCE) index, also rose to an annual rate of 3.3% in July. This increase is in line with market forecasts. The core PCE annual rate, the Federal Reserve’s preferred measure of inflation, rose 4.2%, a slightly stronger rate than the 4.1% increase in June. As expected, both the PCE price index and the core PCE price index increased 0.2% on a monthly basis.
Additional findings from the report indicate that personal income increased by 0.2%. Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.8%. Slightly revised data for June showed that spending rose 0.6%, up from the previously reported 0.5%. Economists had forecast a 0.7% increase in spending.
U.S. companies added 187,000 jobs in August, pointing to a slowing but still robust labor market as the Federal Reserve implements higher interest rates.
From June through August, the economy added 449,000 jobs, the lowest three-month total in three years. In addition, the U.S. government revised job gains for June and July down by 110,000.
Still on the topic of the labor market, the latest report from the Department of Labor shows that the unemployment rate rose from 3.5% to 3.8%, marking the highest level since February 2022. While this may seem low, there is a bright side: 736,000 people have started actively looking for work. It’s worth noting that only people who are actively looking for work are counted as unemployed.
On the trade front, the U.S. goods trade deficit widened 2.6% to $91.2 billion in July. It was previously reported at $87.84 billion, but was revised to $88.8 billion for June. Despite the deficit, both imports and exports increased in July, as follows:
On the manufacturing front, the U.S. Global S&P Manufacturing Purchasing Managers’ Index (PMI) fell to 47.9 in August from 49.0 in July. However, the August reading was above expectations of 47.0.
The Institute for Supply Management released its ISM Manufacturing PMI report for August on September 1st. According to the report, the ISM Manufacturing PMI rose from 46.4 in July to 47.6 in August, beating the analyst consensus of 47. A reading below 50 indicates contraction in the manufacturing sector.
<aside> 💡 The Manufacturing PMI serves as a diffusion index, with readings above 50 indicating expansion in the sector and readings below 50 indicating contraction.
BTC is also still in a downtrend, falling 0.7% last week. Although there was a brief spike above the 200-day moving average, driven by the news of Grayscale’s victory in the SEC lawsuit regarding bitcoin ETF reviews, BTC fell back below the 200 & 250-day moving averages by the end of the week.
The price of ETH was rejected by the 250-day moving average before falling between the 300 and 400-day moving averages. The strongest current support for ETH is at the $1620 price level. A break below the $1620 support level could lead to a deeper decline with the next support area at $1400.