JOLTS Shows a Slowdown in Hiring — Will Crypto Market Slump?

Hand is turning a dice and changes the expression "no job" to "new job"
JOLTS Shows a Slowdown in Hiring — Will Crypto Market Slump?

Key Takeaways:

  • Hiring still exceeds total separations, but the labor market stalled compared to January stats.
  • How do the JOLTS results affect the economy?
  • Will the crypto sector follow the declining labor market?

YEREVAN ( – The latest Job Openings and Labor Turnover Survey (JOLTS) data showed a stall in the labor market, as the number of hires and total separations (both quits and layoffs) dropped to 6.2 million and 5.8 million, respectively.

The chart below shows a decrease in hiring and total separations from January to February. However, the dispersion by company size is noteworthy. While larger companies saw an increase in total separations and a decline in hires, small businesses employing under 50 members of staff showed the opposite sentiment. Their hires increased while layoffs stalled.

Total hires and separations in January and February. Source: Bureau of Labor Statistics.
Total hires and separations in January and February. Source: Bureau of Labor Statistics.

Meanwhile, the change in job openings depended on the industry.

“The largest decreases in job openings were in professional and business services (-278,000); health care and social assistance (-150,000); and transportation, warehousing, and utilities (-145,000). The number of job openings increased in construction (+129,000) and in arts, entertainment, and recreation (+38,000).”

further read the report.
Also read: Initial Jobless Claims Decline Week Over Week — Is Recession at Bay?

Recessionary Risk

Generally, the report’s estimates are significant in the market forecast, including the likelihood of a recession. The latter is a slowdown in economic activity, and the Federal Reserve’s chain of interest rate hikes added to the economic stall in its aim to curb runaway inflation.

However, while the banking crisis raged on, the Fed slowed its hawkish policies in fear of adding strain on financial institutions and causing more uncertainty and fear for market participants.

Meanwhile, Labor is a key economic input, along with capital. Thus, it is logical that unemployment would negatively correlate with economic output. The more the companies make and sell, the more employees they need, and vice versa.

Thus, the expected market move is the inverse of the unemployment sentiment. If hiring is rising against separations, the market will often rally upwards.

If quits and layoffs are up, the market may slump. The hiring exceeded separations in February. However, according to the report, the change from January was “insignificant,” thus the woes of economic implications persist.

Also read: Fed Chairman Jerome Powell Will Sacrifice Jobs to Contain Inflation.

Notably, the labor market affects not only the fiat market but also the cryptocurrency sector. Unfortunately, the report showed a slight change of direction in the labor statistics, and the crypto assets did not react to the news.

Total crypto market valuation in tune with the labor market

The total crypto valuation stalled under the $1.16 trillion mark, unable to break the resistance and struggling at approximately $1.15 trillion in the Asian-Pacific session on April 6.

Total crypto market valuation. Source:
Total crypto market valuation. Source:

Moreover, in tune with the macroeconomic headwinds, the relative strength index (RSI) also diverged from the valuation chart.

While the crypto market cap printed higher highs year-to-date, the RSI established lower highs, hinting there’s not enough bullish sentiment to back the rally and strengthen bearish expectations.

Also read: Donald Trump predicts “worst President” Joe Biden will cause an all-out nuclear World War III soon.

The influence of JOLT on the crypto market is mediated by other factors, such as traders’ perception of digital assets as an alternative to the collapsing banking system. However, as of early April, the total crypto market cap shows signs of decline and growing uncertainty in the labor market.

The latter connection supports crypto’s correlation with risk-on assets rather than sanctuary assets. However, the upcoming release of the March 22 FOMC meeting minutes could shed more light on market expectations.

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