DATA & FIGURES
The ADP report highlighted 48,000 positions added in education and health services, 15,000 in trade, transportation, and utilities, and 14,000 in financial activities. Natural resources and mining lost 5,000 jobs, while leisure and hospitality added just 2,000 positions. Small businesses drove most of the hiring, with establishments with fewer than 50 employees adding 53,000 jobs, and companies with 500 or more employees adding 25,000. Annual pay gains held steady at 4.4% for workers staying in their jobs and edged up to 6.6% for job switchers.
THE SCENARIO
The overarching context is a slowdown in job creation, with labor supply constraints in certain industries. The Fed is in a holding pattern, with markets pricing a 66.3% chance of holding rates steady at its July meeting, and a 33.7% chance of a hike to 375-400 basis points. The backdrop matters for crypto, as a cooling labor market usually strengthens the case for easier policy, which tends to support Bitcoin and other risk assets.
DIRECT QUOTE
"The pace of hiring is telling a story of both supply and demand. We know it's taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation." — Dr. Nela Richardson, ADP Chief Economist
BBN INSIGHT
The Positive Side: A softer labor market could lead to easier policy, which tends to support Bitcoin and other risk assets. However, the current hawkish Fed stance and rising Treasury yields have muted the reaction from Bitcoin traders. The Negative Side: A slowdown in job creation could lead to reduced consumer demand, which could negatively impact the overall economy and crypto markets. Small businesses and certain industries, such as education and health services, may be more resilient to the slowdown, but the overall effect is a slowdown in job creation, which could lead to reduced economic growth.
MARKET REACTION
Cryptocurrencies were trading flat, showing no signs of reaction to the jobs report. Bitcoin was trading near $58,773, down more than 17% in the past one month. Ethereum was trading near $1,592, while XRP was trading near $1.05. U.S.-listed spot Bitcoin ETFs posted $4.5 billion in net outflows during June, as per SoSo Value, their worst month on record, as institutions unwound bets on near-term easing.