|

Breaking: US JOLTS Job Openings increase to 8.04 million in August vs. 7.65 million expected

The number of job openings on the last business day of August stood at 8.04 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed the 7.71 million (revised from 7.67 million) openings reported in July and surpassed the market expectation of 7.65 million.

"Over the month, hires changed little at 5.3 million. Total separations changed little at 5.0 million," the BLS noted in its press release. "Within separations, quits (3.1 million) continued to trend down and layoffs and discharges (1.6 million) changed little."

Market reaction to JOLTS Job Openings data

These figures don't seem to be having a significant impact on the US Dollar's (USD) valuation. At the time of press, the USD Index was up 0.35% on the day at 101.10.

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 New Zealand Dollar.

 USDEURGBPJPYCADAUDNZDCHF
USD 0.53%0.46%-0.20%-0.17%0.25%0.65%-0.14%
EUR-0.53% -0.07%-0.76%-0.70%-0.27%0.11%-0.69%
GBP-0.46%0.07% -0.67%-0.63%-0.21%0.19%-0.60%
JPY0.20%0.76%0.67% 0.04%0.46%0.85%0.07%
CAD0.17%0.70%0.63%-0.04% 0.43%0.82%0.04%
AUD-0.25%0.27%0.21%-0.46%-0.43% 0.39%-0.42%
NZD-0.65%-0.11%-0.19%-0.85%-0.82%-0.39% -0.78%
CHF0.14%0.69%0.60%-0.07%-0.04%0.42%0.78% 

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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

 


This section below was published as a preview of the US JOLTS Job Openings data at 08:00 GMT.

  • The US JOLTS data will be watched closely by investors ahead of the September employment report.
  • Job openings are forecast to stay below 8 million for the third consecutive month in August.
  • Markets try to figure out whether the Fed will opt for another large rate cut at the next meeting.

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 is scrutinized by market participants and Federal Reserve (Fed) policymakers because it can provide valuable insights regarding the supply-demand dynamics in the labor market, a key factor impacting salaries and inflation. Job openings have been declining steadily since coming in above 12 million in March 2022, pointing to a steady cooldown in labor market conditions. In July, the number of job openings declined to 7.673 million, marking the lowest reading since January 2021.

What to expect in the next JOLTS report?

"Over the month, hires changed little at 5.5 million," the BLS noted in its July JOLTS report. "Separations increased to 5.4 million. Within separations, quits (3.3 million) and layoffs and discharges  (1.8 million) changed little."

Markets expect job openings slightly lower at around 7.65 million on the last business day of August. Federal Reserve (Fed) policymakers have made it clear after the July policy meeting that they are shifting their focus to the labor market, given the encouraging signs of inflation retreating toward the central bank’s target. While speaking at the post-meeting press conference after the September meeting, “upside risks to inflation have diminished and downside risks to labor market have risen,” Fed Chair Jerome Powell said.

The CME FedWatch Tool currently shows that markets are pricing in a nearly 40% probability of one more 50 basis points (bps) rate reduction at the next policy meeting in early November. In case there is a significant decline, toward 7 million, in the JOLTS Job Openings data, the immediate reaction could hurt the US Dollar (USD) with investors leaning toward a large interest rate cut. On the other hand, a reading above analysts' expectations could ease concerns over the labor market outlook and support the USD. 

When will the JOLTS report be released and how could it affect EUR/USD?

Job openings numbers will be published on Tuesday, October 1, at 14:00 GMT. Eren Sengezer, European Session Lead Analyst at FXStreet, shares his view on the potential impact of JOLTS data on EUR/USD:

“Unless there is a significant divergence between the market expectation and the actual print, the market reaction to JOLTS data is likely to remain subdued, with investors refraining from taking large positions ahead of the September employment report on Friday.”

“Nevertheless, EUR/USD’s near-term technical outlook suggests that the bullish bias remains intact. The Relative Strength Index (RSI) indicator on the daily chart holds near 60 and the pair trades within the ascending regression channel started in late June. In case EUR/USD stabilizes above 1.1200 (static level) and starts using this level as support, it could target 1.1275 (July 18, 2023, high) and 1.1320 (upper limit of the ascending channel) next. On the downside, the 20-day Simple Moving Average (SMA) aligns as interim support at 1.1100 before 1.1070 (lower limit of the ascending channel) and 1.1030 (50-day SMA).”

US Dollar FAQs

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.

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.

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.

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.

Author

FXStreet Team

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

More from FXStreet Team
Share:

Editor's Picks

USD/JPY: Bears remain in control with focus on 155.00

USD/JPY accelerates its severe pullback and slips back to the 155.40-155.30 band, flirting with seven-month lows on Thursday. The sharp decline in spot comes as investors continue to assess a potential rate hike by the BoJ as soon as its September 18 meeting.

AUD/USD ranges above 0.7150 despite upbeat Chinese PMI

AUD/USD struggles to capitalize on the previous day's bounce from a nearly two-week low and ranges above 0.7150 in Asia on Thursday, as dismal Australian trade data counter upbeat China's RatingDog Services PMI. However, the pair's upside remains in check as the US Dollar stalls the weak ADP report-led slide amid escalating US-Iran tensions and firming September Fed rate-hike bets.

Gold struggles to extend the bounce past $4,500

Gold adds to Wednesday’s gains and reclaims the area near the key $4,500 mark per troy ounce on Thursday. The strong decline in the US Dollar coupled with further weakness in US Treasury yields across the board also bolsters the move higher in the precious metal.

XRP defends key support, XLM awaits breakout as derivatives strengthen
Ripple (XRP) and Stellar (XLM) show divergent technical outlooks as traders assess whether the recent weakness could give way to a recovery. XRP is finding support and defining a key support zone, while XLM slips below a cluster of Exponential Moving Averages (EMAs).
Bitcoin steadies as markets turn cautious ahead of key economic data

Bitcoin (BTC) steadies around $77,700 on Thursday, trading sideways after its sharp rally during the second half of August. Institutional demand supports this range-bound price action, with spot Exchange Traded Funds (ETFs) recording mixed flows so far this week

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.