FOMC minutes and jobs numbers lead heavy list of economic releases

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The shortened holiday week in the US means a somewhat compressed schedule of economic data that could affect the outlook for inflation and interest rates, and therefore the outlook for bitcoin (BTC) and other cryptocurrencies.

At 2 p.m. ET Wednesday, the minutes of the US Federal Reserve’s mid-June meeting of its Federal Open Market Committee (FOMC) tasked with setting rates. At that meeting, the Fed paused its more than a year-long series of rate hikes that had taken its benchmark federal funds rate to 5%-5.25% from 0% at the start of 2022.

In public comments since that meeting, Fed officials including Chairman Jay Powell made it clear that the pause in rate hikes was indeed just a pause. Central bank policymakers currently expect to raise rates at least twice more in 2023. Rate traders agree, with the CME’s Fed Watch tool currently forecasting an 89% chance the Fed in from its next meeting in late July resume rate hikes with a 25 basis point (bp) increase in the federal funds rate.

Market participants will get a glimpse of what the employment picture looked like in June Thursday at 8:15 a.m. (ET) thanks to the ADP jobs report. The forecast is for a significant slowdown in private sector hiring to 160,000 jobs in June from 278,000 in May.

On Thursday, minutes later, the government’s initial unemployment claims figure will be released. Although this indicator has been rising in recent months, it remains below levels that would be associated with overall job losses in the economy. Economists expect Thursday’s report to show initial jobless claims at 245,000 from 239,000 previously.

Ninety minutes later on Thursday is the Job Openings and Job Rotation Survey (JOLT), a previously little-tracked report that has taken on greater prominence of late as players of the market were trying to leave nothing to chance in the search for signals on job prospects. This number has fallen slightly over the past year, signaling the most modest of labor market easing. Forecasters expect Thursday’s print to show JOLTs at 9.9 million, down from 10.1 million previously.

This week’s main event is Friday morning at 8:30 a.m. ET, featuring the US Nonfarm Payrolls report for June. This gauge has exceeded expectations for a staggering 14 consecutive months, continuing to show strength in the face of soaring interest rates that many believe have slowed the economy and further dampened hiring. According to economists’ forecasts, 250,000 jobs were added in June, compared to 339,000 in May. The unemployment rate is expected to remain at 3.7%.

While many were relaxing before July 4, an important economic indicator was released on Monday with the ISM Manufacturing Purchasing Managers’ Index (PMI). This slowed to 46.0 in June from 46.9 previously and was the lowest level since May 2022 when many Covid lockdowns were still in effect. Numbers below 50 for this report are associated with a contraction in the manufacturing sector, and this was the 7th consecutive month below the 50 level.

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