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The number of job openings at JOLTS rose to 8.04 million in August, compared to an expected 7.65 million

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

“Over the month, new hires barely changed at 5.3 million. The total number of layoffs was little changed at 5.0 million,” the BLS noted in its press release. “When it comes to separations, layoffs (3.1 million) continue to trend downward, and layoffs and layoffs (1.6 million) have seen little change.”

Market reaction to JOLTS job vacancies data

These numbers do not appear to have a significant impact on the valuation of the US dollar (USD). At press time, the USD index was up 0.35% intraday at 101.10.

US dollar PRICE today

The table below shows the percentage change in the US Dollar (USD) against the listed major currencies today. The US dollar was strongest against the New Zealand dollar.

USD EUR GBP JPY CAD AUD NZD CHF
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%
JPY 0.20% 0.76% 0.67% 0.04% 0.46% 0.85% 0.07%
CAD 0.17% 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%
CHF 0.14% 0.69% 0.60% -0.07% -0.04% 0.42% 0.78%

The heatmap shows percentage changes between the most important currencies. The base currency is selected from the left column while the quote currency is selected from the top row. For example, if you select the US dollar from the left column and switch to the Japanese yen along the horizontal line, the percentage change shown in the field will be USD (basis)/JPY (rate).

This section below was published at 08:00 GMT as a preview of JOLTS US job openings data.

  • The US JOLTS data will be closely watched by investors ahead of the September jobs report.
  • The number of job vacancies in August is expected to remain below 8 million for the third month in a row.
  • Markets are trying to figure out whether the Fed will decide to make another big 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 on the change in the number of vacancies in August as well as the number of layoffs and terminations.

JOLTS data is being closely scrutinized by market participants and Federal Reserve (Fed) policymakers because it can provide valuable insights into supply-demand dynamics in the labor market, a key factor affecting wages and inflation. Since the number of job vacancies topped 12 million in March 2022, it has declined steadily, indicating a steady slowdown in labor market conditions. In July, the number of job vacancies fell to 7.673 million, marking the lowest level since January 2021.

What awaits you in the next JOLTS report?

“Over the month, hiring was little changed at 5.5 million,” the BLS noted in its July JOLTS report. “Separations rose to 5.4 million. There was little change within separations, layoffs (3.3 million) and layoffs and layoffs (1.8 million).”

Markets expect the number of job vacancies to fall slightly to around 7.65 million on the last business day in August. Federal Reserve (Fed) policymakers made it clear after the July policy meeting that they will shift their focus to the labor market amid encouraging signs that inflation is declining toward the central bank's target. Speaking at the press conference following the meeting in September, Fed Chairman Jerome Powell said: “Upside risks to inflation have decreased and downside risks to the labor market have increased.”

The CME FedWatch tool currently shows that markets are pricing in a nearly 40% chance of another 50 basis point (bps) rate cut at the next policy meeting in early November. Should there be a significant decline in JOLTS job vacancies data towards 7 million, the immediate reaction could hurt the US dollar (USD) as investors lean towards a sharp rate cut. On the other hand, a reading above analysts' expectations could ease concerns about the labor market outlook and support the USD.

When will the JOLTS report be released and what impact could it have on EUR/USD?

Vacancies figures will be published on Tuesday 1 October at 2pm GMT. Eren Sengezer, European Session Lead Analyst at FXStreet, shares his opinion on the possible impact of the JOLTS data on EUR/USD:

“Unless there is a significant divergence between market expectations and actual numbers, the market reaction to the JOLTS data is likely to remain muted as investors refrain from taking large positions ahead of the September jobs report on Friday.”

“Nevertheless, the short-term technical outlook for EUR/USD suggests that the bullish bias remains intact. The Relative Strength Index (RSI) indicator on the daily chart is close to 60 and the pair has been trading within the ascending regression channel since late June. If EUR/USD stabilizes above 1.1200 (static level) and starts using this level as support, it could next reach 1.1275 (July 18, 2023 high) and 1.1320 (upper boundary of the ascending channel). aim for. On the other hand, the 20-day SMA (Simple Moving Average) stands as interim support at 1.1100 ahead of 1.1070 (lower boundary of the ascending channel) and 1.1030 (50-day SMA).”

Frequently asked questions about the US dollar

The US dollar (USD) is the official currency of the United States of America and the “de facto” currency of many other countries where it circulates alongside local banknotes. According to 2022 data, it is the most heavily traded currency in the world, accounting for over 88% of total global foreign exchange turnover, or an average of $6.6 trillion in transactions per day. After World War II, the USD took over from the British pound as the world reserve currency. For most of its history, the U.S. dollar was backed by gold until the Bretton Woods Agreement abolished the gold standard in 1971.

The single most important factor affecting the value of the U.S. dollar is monetary policy, which is set by the Federal Reserve (Fed). The Fed has two missions: to achieve price stability (control inflation) and to promote full employment. The most important tool to achieve these two goals is the adjustment of interest rates. If prices rise too quickly and inflation is above the Fed's target of 2%, the Fed will raise interest rates, which will benefit the value of the USD. If inflation falls below 2% or the unemployment rate is too high, the Fed can cut interest rates, weighing on the greenback.

In extreme situations, the Federal Reserve can also print more dollars and initiate quantitative easing (QE). QE is the process by which the Fed significantly increases the flow of credit in a stalled financial system. This is a non-standard policy measure used when credit has dried up because banks have stopped lending to each other (for fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the desired result. It was the Fed's weapon of choice to combat the credit crunch during the Great Financial Crisis in 2008. The Fed prints more dollars and uses it to buy US government bonds primarily from financial institutions. QE usually leads to a weaker US dollar.

Quantitative tightening (QT) is the reverse process in which the Federal Reserve stops purchasing bonds from financial institutions and does not reinvest the capital of the bonds it holds at maturity in new purchases. It is usually positive for the US dollar.

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