JOLTS Job Openings decline to 7.44 million in September vs. 7.99 million expected

Posted by Admin October 29, 2024 Jobs

The number of job openings on the last business day of September stood at 7.44 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday.

Developing story, please refresh the page for updates.

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 release of the October employment report on Friday.
Job openings are forecast to retreat slightly below 8 million in September.
The state of the labor market is a key factor for Fed officials when setting policy.

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 September, 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 August, however, the downward trend halted as the number of job openings climbed above 8 million from 7.7 million in August.

What to expect in the next JOLTS report?

Markets expect job openings to come in at 7.99 million on the last business day of September. 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.

It is important to note that, while the JOLTS data refers to the end of September, the official Employment report measures data for October.

The upbeat employment report for September, which showed that Nonfarm Payrolls (NFP) rose by 254,000, caused market participants to refrain from pricing in another large Fed rate cut at the policy meeting to be held on November 7. Assessing the recent employment data, Kansas City Fed President Jeffrey Schmid argued that the labor market was normalizing after a period of record over-employment and untenable low unemployment rates, rather than an outright deterioration.

The CME FedWatch Tool currently shows that markets are nearly fully pricing in a 25 basis points (bps) rate reduction at the next policy meeting. Meanwhile, the probability of one more 25 bps rate cut in December currently stands at around 72%, against a 27% chance of a policy hold.

In case there is a positive surprise in the job openings data, with a reading of at or above 8.5 million, the immediate reaction could boost the US Dollar (USD) by causing investors to reassess the probability of a December rate cut. On the other hand, a disappointing print at or below 7.5 million could hurt the USD.

“Over the month, hires changed little at 5.3 million. Total separations changed little at 5.0 million,” the BLS noted in its August JOLTS report. “Within separations, quits (3.1 million) continued to trend down and layoffs and discharges (1.6 million) changed little.”

Employment FAQs

Labor market conditions are a key element to assess the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and thus economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels and thus monetary policy as low labor supply and high demand leads to higher wages.

The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.

The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given its significance as a gauge of the health of the economy and their direct relationship to inflation.

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

Job openings’ numbers will be published on Tuesday 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 short-lived, with investors refraining from taking large positions ahead of the third-quarter Gross Domestic Product (GDP) data and the October employment report, which will be published on Thursday and Friday, respectively.”

“EUR/USD’s near-term technical outlook suggests that the bearish bias remains intact. The Relative Strength Index (RSI) indicator on the daily chart stays below 40 and the 20-day Simple Moving Average (SMA) continues to move away from the 100-day SMA after completing a bearish cross late last week.”

“On the upside, 1.0870 (Fibonacci 23.6% retracement level of October downtrend, 200-day SMA) aligns as key resistance. If EUR/USD rises above this level and starts using it as support, technical buyers could take action. In this scenario, 1.0930 (Fibonacci 38.2% retracement, 100-day SMA) could be seen as the next bullish target before 1.1000 (round level). Looking south, first support could be spotted at 1.0770 (end-point of the downtrend) before 1.0700 (round level) and 1.0620 (static level from April).”