Select Language

US JOLTS Job openings expected to resume downward trend in September

Breaking news

US JOLTS Job openings expected to resume downward trend in September

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.10.29 17:01
US JOLTS Job openings expected to resume downward trend in September

update 2024.10.29 17:01

  • 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."

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)."

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.

 


Date

Created

 : 2024.10.29

Update

Last updated

 : 2024.10.29

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Mexican Peso plunges to new yearly low amid strong US Dollar

The Mexican Peso depreciated sharply against the Greenback on Friday and recorded new yearly highs of 20.29, above the former 20.22 peak late in the North American session, set to print weekly losses of over 1.50%.
New
update2024.11.02 07:31

Australian Dollar declines after high-tier US data, Chinese worries

.
New
update2024.11.02 06:40

NZD/JPY Price Analysis: Mixed technical outlook with sideways movement

Friday's trading saw the NZD/JPY pair continue its sideways movement of the past sessions.
New
update2024.11.02 05:49

Forecasting the upcoming week: US Presidential Elections overshadows Fed's decision

This past week, the US Dollar consolidated at around familiar levels, though it is set to snap four consecutive weeks of gains ahead of a busy schedule.
New
update2024.11.02 05:32

Dow Jones Industrial Average surges on soft US NFP data, Fed easing hopes rise

The Dow Jones Industrial Average (DJIA) posted solid gains of close to almost 300 points or 0.71% on Friday, on softer-than-expected economic data, reinforcing investors' hypothesis of further easing by the Federal Reserve.
New
update2024.11.02 04:04

US Dollar rebounds after NFPs and ISM PMIs

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, rebounded intraday despite the weak jobs data as annual wage inflation rose to 4%, indicating that inflationary pressures remain elevated.
New
update2024.11.02 04:00

Canadian Dollar mixed after US NFPs, ISM PMIs

The USD/CAD currency pair saw a mild decline in Friday's session, reaching a low of 1.3920.
update2024.11.02 02:10

GBP/USD Price Forecast: Climbs post weak US jobs report, eyes 100-day SMA

The Pound Sterling erased some of its Thursday's losses against the Greenback and rose 0.56% above its opening price after a dismal US jobs report reassured investors the Federal Reserve would continue to ease policy.
update2024.11.01 23:56

RBNZ: A high bar for a 75bps cut - Standard Chartered

We think the bar is high for a 75bps OCR cut given the prevailing economic backdrop.
update2024.11.01 23:56

EUR/CAD Price Prediction: Decisively breaks out of top of pattern

EUR/CAD rallies and pierces decisively above the slanting roof of the price pattern it had been trading in since the beginning of August.
update2024.11.01 23:40

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel