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We’ve had some odd job reports over the years, but the key is to always follow the trend. That’s especially important with Friday’s data, which showed 339,000 jobs were created in May even while the unemployment rate increased.

As someone who wrote that we should get job openings toward 10 million in this expansion, I am always mindful of my other labor talking point. If COVID-19 didn’t happen, the total employment numbers in the U.S. today should be between 158 million and 159 million, or in a weaker labor market growth scenario, between 157 million and 158 million.

Today, we stand at 156,105,000, so I think we are still in make-up mode until we reach a range acceptable to a fast economic recovery.

That’s why the jobs data has beaten expectations 14 months in a row. What the U.S. has that other countries don’t is a massive young workforce. While population growth is slowing here, we have the demographic muscle that other countries don’t have — if we didn’t have that, our economic discussion would be different.

Now let’s look at the labor market on all fronts from the data we got this week to get a comprehensive view of the labor market today. On Friday the BLS reported job growth came in at 339,000, with positive revisions, while the unemployment rate went higher, as there was a drop in self-employed workers.

From BLS: Total nonfarm payroll employment increased by 339,000 in May, and the unemployment rate rose by 0.3 percentage point to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, government, health care, construction, transportation and warehousing, and social assistance.

Hours worked have fallen in the last few months, and wage growth is slowing. The fear of 1970s-style inflation was that wages could grow out of control in a tight labor market. In theory, 2022 and 2023 are tight labor markets and wage growth is slowing down. This trend should continue for the next 12 months as well.

Here is a breakdown of that data for those aged 25 and older:

• Less than a high school diploma: 5.7% (2 months ago, 4.8%)
• High school graduate and no college: 3.9%
• Some college or associate degree: 3.2%
• Bachelor’s degree or higher: 2.1%.

The noticeable data line here is that the unemployment rate for those without a high school education is up almost 1% from two months ago.

Here is the breakdown of the jobs created this month, another big month for the government, which typically doesn’t continue at this pace. Construction labor has held up very well, even though housing permits have been falling for some time. The backlog from COVID-19 has been a jobs program for the U.S. as we are still slowly growing the housing completion data.

So the BLS jobs report is still pushing along, while wage growth is slowing down. Jobs Friday is one piece of the labor pie — we have two other data lines that we always need to keep an eye on to know the health of the labor market: job openings and jobless claims.

As the only person on Earth who talked about job openings data getting to 10 million in this recovery, I am surprised that job openings data is still around that mark. But that is off the recent highs of 12 million.

At this point of the economic expansion, I am putting more weight on jobless claims data than job openings (JOLTS). For me, the Fed doesn’t pivot, or the 10-year yield doesn’t break under 3.21%, until jobless claims break over 323,000 on the four-week moving average, and that isn’t happening either.

As we can see below, the Gandalf line in the sand has held up the entire year, even though it was tested many times.

As we can see below, the jobless claims four-week moving average is still far from breaking over 323,000. I chose that number using many different variables as I think when we crack about that level, it will be noticeable to everyone — even the Fed — that the labor market has broken.

From the St. Louis Fed: Initial claims for unemployment insurance benefits increased by 2,000 in the week ended May 27, to 232,000. The four-week moving average declined, to 229,500.

It’s important to understand the labor dynamics of this economic expansion. We had such a shock in the economy with COVID-19 and a strong labor market recovery that the make-up labor demand, which doesn’t get talked about much, is a significant reason we still see healthy numbers.

Also, it’s essential to understand the demographic difference now and what we had to deal with after 2008. The Baby Boomers are leaving the labor market, and every month that happens, they need to be replaced if demand is growing. This is why having a healthy number of younger workers not only helps with that but also provides replacement consumers, as those who leave the labor market tend to consume a bit differently than younger workers.

At this stage of the economic cycle jobless claims is the data line that matters most. Once jobless claims break above 323,000, then and only then I believe we can talk about a Fed pivot — first in their language and then possibly with rate cuts.

The Federal Reserve is scared to death of the 1970s inflation, and they genuinely believe that breaking the labor market is the best way to prevent that type of inflation from happening. As a country, we are fighting against a group of people stuck in the wrong decade with their economic mindset on inflation.

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Bitcoin has been busy “perfectly” mimicking its moves after the March 2020 crash, QCP Capital argues.

Bitcoin “consolidation” could end by July, new research predicts as optimism over a BTC price breakout returns.

In its latest market update on June 2, trading firm QCP Capital revealed a bullish bias on both Bitcoin  (BTC) and the largest altcoin, Ether (ETH).

QCP Capital: Bitcoin consolidation “played out perfectly”

Bitcoin price has been ranging between $26,000 and $31,000 since mid-March, but analysts are increasingly calling time on the sideways action.

QCP Capital is among them, predicting a change of course as soon as the end of the month.

This, it argues, is thanks to the United States debt ceiling “sideshow” vanishing, leaving Bitcoin closely mimicking its consolidation and breakout phase from 2020.

“With the passage of the Debt ceiling bill through the House and Senate that extends the ceiling until Jan 2025, we can now all move on and not have to worry about any political sideshow again until next year’s US Presidential elections,” it wrote.

“This means we now return to our regular programming of proper macro and crypto narratives.”

For QCP, the price levels may be different, but the underlying behavior is the same in 2023 as at the start of the COVID-19 pandemic.

Back then, the Federal Reserve unleashed a giant $4 trillion worth of liquidity, buoying risk assets and ultimately sending Bitcoin to new all-time highs.

“In March 2020 we were on the verge of a massive price breakdown below 5k when the Fed unleashed the liquidity tap, resulting in an exponential price increase as we approached the halving cycle the following year,” it wrote, quoting a previous edition of its “Just Crypto” newsletter series.

“Similarly in March 2023, we were about to break below 20k on BTC as a result of the banking crisis risk-off, when the Fed again unleashed the liquidity tap to drive us back above 30k, as we head into the next halving cycle next year.”

Should the relationship continue to play out, the next phase is obvious: a dramatic exit of the trading range, with QCP positioning long options plays.

“This consolidation has played out perfectly so far, but we expect that we are soon coming close to the end sometime this month. As a result, we recommend positioning for an upcoming big move through long 3m and 6m strangles here, with a bias to the long call side,” it added.

An accompanying chart showed the month of June as a hotspot for both BTC and ETH volatility from 2019 onward.

Betting on a BTC price breakout

As Cointelegraph reported, other signals coming from Bitcoin point to a new paradigm taking over shortly.

Related: Bitcoin wicks down to $26.5K, but trader eyes chance for ‘bullish surprise’

These include an on-chain metric tracking hodler behavior, which in late May put BTC/USD in a “transition” phase away from “capitulation” and on the way to “euphoria.”

Multiple market participants, meanwhile, argue that BTC price action is at a critical stage, with a decision on its trajectory now due.

BTC/USD traded at near $27,000 on June 2, data from Cointelegraph Markets Pro and TradingView showed, having ended May down 7%.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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