The number of job openings on the last business day of August stood at 9.6 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed 8.9 million (revised from 8.8 million) openings in July and surpassed the market expectation of 8.8 million by a wide margin.
"Over the month, the number of hires and total separations changed little at 5.9 million and 5.7 million, respectively," the BLS noted in the press release and added:
"Within separations, quits (3.6 million) and layoffs and discharges (1.7 million) changed little."
Market reaction to JOLTS Job Openings
The US Dollar gathered against its rivals with the immediate reaction and the US Dollar Index climbed to its highest level since November 2022. As of writing, the index was up 0.25% on the day 107.28.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
United States JOLTS Job Openings
JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.Read more.
Next release: 11/01/2023 14:00:00 GMT
Source: US Bureau of Labor Statistics
This section below was published as a preview of JOLTS Job Openings data at 09:00 GMT.
- JOLTS report will be watched closely by Fed officials ahead of September jobs data.
- Job openings are forecast to hold steady at around 8.8 million on the last business day of August.
- US labor market conditions remain out of balance despite Fed rate hikes.
The Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday by the US Bureau of Labor Statistics (BLS). The publication will provide data about the change in the number of job openings in August, alongside the number of layoffs and quits.
JOLTS data will be scrutinized by market participants and Federal Reserve policymakers because it could provide valuable insights regarding the supply-demand dynamics in the labor market, a key factor driving up salaries and inflation.
What to expect in the next JOLTS report?
The number of job openings on the last business day of August is forecast to stay little changed at around 8.8 million. "Over the month, the number of hires and total separations changed little at 5.8 million and 5.5 million, respectively," the BLS noted in July’s JOLTS. "Within separations, quits (3.5 million) decreased, while layoffs and discharges (1.6 million) changed little," the publication further read.
Job openings have declined steadily since April, falling from 10.3 million to 8.8 million in July. Following the September policy meeting, Federal Reserve (Fed) Chairman Jerome Powell acknowledged that the supply and demand in the labor market continued to come into a better balance but noted that conditions were still tight. Although the revised Summary of Economic Projections showed that the majority of policymakers saw it appropriate to raise the policy rate one more time before the end of the year, market participants are still pricing in a more than 50% probability that the interest rate will be held steady at the 5.25%-5.5% range this year, according to the CME Group FedWatch Tool.
FXStreet Analyst Eren Sengezer shares his view on the importance of the JOLTS Job Openings data and the potential market reaction:
“Growing fears over a government shutdown in the US triggered a sell-off in US government bonds toward the end of September and surging yields provided a boost to the US Dollar (USD). With US Congress passing a stopgap funding bill to avert a shutdown until November 17, investors could shift their attention back to US data releases and their potential impact on the Fed’s policy outlook.”
“Ahead of Friday’s September jobs report, a smaller-than-expected Job Openings reading, at or below 8.5 million, could attract dovish Fed bets and weigh on the USD. On the other hand, an unexpected increase in the data with a print of 9.5 million or higher could provide a boost to the currency. Given the USD’s overbought conditions, however, the market reaction to a weak figure is likely to be more severe than a reaction to a positive surprise.”
When will the JOLTS report be released and how could it affect EUR/USD?
Job openings data will be published at 14:00 GMT. EUR/USD closed every week of September in the red and lost 2.5% on a monthly basis. If the JOLTS report reaffirms cooling conditions in the labor market, the pair could gather recovery momentum.
Eren points out key technical levels to watch for EUR/USD ahead of JOLTS data:
“EUR/USD dropped below the lower limit of the descending regression channel coming from late July and the Relative Strength Index (RSI) indicator on the daily chart dropped below 30 early Tuesday, suggesting that the pair could stage a correction before the next leg lower”
“1.0500 (static level, psychological level) aligns as a key pivot point for the pair. If EUR/USD fails to reclaim that level and continues to use it as resistance, 1.0415 (static level from November 2022) could be set as the next bearish target before 1.0350 (static level from May 2022). On the flip side, buyers could show interest if the pair climbs out of the descending channel by stabilizing above 1.0600. Above that level, 1.0650 (20-day Simple Moving Average) could be seen as next resistance before 1.0700 (static level, psychological level)”
US Dollar FAQs
What is the US Dollar?
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
How do the decisions of the Federal Reserve impact the US Dollar?
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
What is Quantitative Easing and how does it influence the US Dollar?
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
What is Quantitative Tightening and how does it influence the US Dollar?
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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