Key US Economic Data to Drive Crypto Volatility This Week

Crypto markets are closely monitoring key US economic data this week to assess the health of the nation’s economy. As the year-end approaches, critical labor market reports — closely watched by the Federal Reserve—are on the calendar.

Given the potential impact on portfolios, traders may adjust their strategies around these upcoming events.

ISM Manufacturing

The Institute of Supply Management (ISM) will release the November ISM Manufacturing data on Monday, December 2, marking the first business day of the month. This index, also called the purchasing managers’ index (PMI), offers a monthly snapshot of US economic activity. It is derived from a survey of purchasing managers at manufacturing firms across the country and is widely viewed as a critical gauge of the US economy’s health.

The ISM manufacturing index comes after weak purchasing managers’ surveys in the Eurozone, where businesses have cut payrolls for four consecutive months. The Eurozone Composite PMI dropped to 48.1 in November, down from 50.0 in October, indicating contraction. Similarly, the UK’s surveys unexpectedly showed the economy slipping into contraction for the first time in over a year, driven by concerns over rising employment taxes and steeper export tariffs.

Following this data, the Euro fell to a 23-month low of $1.0336. Market attention will now turn to the US, where the previous ISM manufacturing index was 46.5, with a consensus forecast of 47.5 for November. If a similar downturn occurs in the U.S., weakening the dollar (USD), investors may pivot toward Bitcoin (BTC) and other cryptocurrencies as a hedge against economic uncertainty.

JOLTS Job Openings

On Tuesday, December 3, the US Bureau of Labor Statistics (BLS) will release the Job Openings and Labor Turnover Survey (JOLTS) for October. The publication will provide data about the change in the number of job openings in October as well as the number of layoffs and quits.

The data provide valuable insights regarding the supply-demand dynamics in the labor market, a key factor affecting salaries and inflation. In hindsight, job openings in the US have been declining steadily since coming in above 12 million in March 2022. This suggests a steady easing in labor market conditions.

In August 2024, however, the downward trend halted as the number of job openings climbed to 8.4 million from 7.7 million in July. September recorded 7.44 million job openings. Of note is that the state of the labor market is a key factor for Fed officials when setting policy. Now, the median forecast is a slight increase to 7.49 million in October as the effects of the Hurricane and strikes continue to wade off.

Nonfarm Payrolls (ADP Private)

Markets will also be watching for the ADP National Employment Report on Wednesday, December 4, as one of the most important US economic data this week. Otherwise termed nonfarm payrolls, this data will reveal the number of jobs in the private sector and government agencies in November.

In hindsight, the October payrolls report shocked markets when hiring fell to its lowest level since the pandemic. Then, the US economy saw just 12,000 jobs added, well below the consensus of 106,000. There had been an expectation of a slowdown due to the effects of the Boeing strikes and Hurricanes Helene and Milton, but not on such a scale.

Invigorating the surprise further, the ADP report showed a sizeable improvement on September’s 159,000, rising to 233,000. The weakness of the October jobs report confirmed that the Fed would look to cut rates in their next.

Nevertheless, the general trend is that hiring has been slowing with the BLS also revising its numbers for the previous 2 months lower by 112,000. Notwithstanding, there remains an element of confirmation bias in this type of argument.

Initial Jobless Claims

On Thursday, December 5, the weekly jobless claims will also shed light on the health of the US labor market. The previous initial jobless claims data came in at 213,000 for the week ending November 23. The median forecast is 215,000 for last week.

Meanwhile, weekly unemployment claims have been falling steadily for the past several weeks after hitting their highest level in October of more than a year. Nevertheless, the trend has been showing that while US initial jobless claims decline, continuing jobless claims rise. This points to an environment where employers are trying to retain their employees for as long as possible. However, employees who lose their jobs are finding it difficult to get a new job.

US Employment Report

The November employment report is due on Friday, December 6. It is expected to sum up US economic data on the labor market for the last month. Economists expect November’s employment report will show payrolls rose by more than 250,000. 33,000 Boeing workers were returning from strikes and coming back to work at Boeing’s suppliers after Hurricane Milton.

The Friday data will come after core personal consumption expenditures (PCE) prices in October failed to exceed expectations, consistent with allowing the Fed to extend its interest rate cut cycle next month.

“The US jobs report on Friday will be the key data release next week ahead of the Fed’s next decision on December 18,” Deutsche Bank analysts said in a note.

Ahead of these US economic data, BTC is trading for $96,516 as of this writing, a modest 0.15% rise since Monday’s session opened.