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The number of job vacancies at JOLTS fell to 7.44 million in September compared to an expected 7.99 million

The number of job openings on the last business day of September was 7.44 million, the US Bureau of Labor Statistics (BLS) reported on Tuesday in the Job Openings and Labor Turnover Survey (JOLTS). This figure followed the 7.86 million recorded in August (revised from 8.4 million) and was below the market expectation of 7.99 million.

“Over the month, new hires barely changed at 5.6 million. The number of total layoffs remained unchanged at 5.2 million,” the BLS press release said. “Little has changed in separations, layoffs (3.1 million) and layoffs and layoffs (1.8 million).”

Market reaction to JOLTS job vacancies data

The immediate reaction put the US dollar under downward pressure. At press time, the US Dollar Index, which hit a three-month high above 104.60 earlier in the day, was unchanged on the day at 104.30.

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 weakest against the British pound.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.13% -0.11% 0.11% 0.05% 0.32% 0.25% 0.30%
EUR -0.13% -0.23% -0.03% -0.08% 0.19% 0.12% 0.21%
GBP 0.11% 0.23% 0.22% 0.16% 0.43% 0.34% 0.44%
JPY -0.11% 0.03% -0.22% -0.06% 0.22% 0.12% 0.23%
CAD -0.05% 0.08% -0.16% 0.06% 0.27% 0.20% 0.28%
AUD -0.32% -0.19% -0.43% -0.22% -0.27% -0.08% -0.02%
NZD -0.25% -0.12% -0.34% -0.12% -0.20% 0.08% 0.07%
CHF -0.30% -0.21% -0.44% -0.23% -0.28% 0.02% -0.07%

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 release of the October jobs report on Friday.
  • The number of job vacancies is forecast to fall slightly below 8 million in September.
  • The state of the labor market is a key factor for Fed officials in determining 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 on the change in the number of vacancies in September 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. However, the downward trend stopped in August as the number of job vacancies rose to over 8 million from 7.7 million in August.

What awaits you in the next JOLTS report?

Markets expect there will be 7.99 million job vacancies on the last business day of September. 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.

It is important to note that the JOLTS data is for the end of September, but the official employment report measures data for October.

The positive September jobs report, which showed a 254,000 rise in Nonfarm Payrolls (NFP), led market participants to refrain from pricing in another big Fed rate cut at the November 7 policy meeting. Assessing Recent Employment Data, Kansas City Fed President Jeffrey Schmid argued that after a period of record overemployment and unsustainably low unemployment rates, the labor market is normalizing rather than heading into complete deterioration.

The CME FedWatch Tool currently shows that markets are almost fully pricing in a 25 basis point (bps) rate cut at the next policy meeting. Meanwhile, the probability of another 25 basis point rate cut in December is currently around 72%, while the probability of a rate peg is 27%.

Should there be a positive surprise in the jobs data of 8.5 million or more, the immediate reaction could boost the US dollar (USD) by causing investors to reassess the likelihood of a rate cut in December. On the other hand, a disappointing reading at or below 7.5 million could hurt the USD.

“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 August JOLTS report. “As part of the separations, the trend in layoffs (3.1 million) continued to decline, and there was little change in layoffs and layoffs (1.6 million).”

Fed FAQs

Monetary policy in the USA is shaped by the Federal Reserve (Fed). The Fed has two missions: to achieve price stability and to promote full employment. Their main tool for achieving these goals is to adjust interest rates. If prices rise too quickly and inflation is above the Fed's 2 percent target, interest rates are raised, raising borrowing costs throughout the economy. This leads to a stronger US dollar (USD) as it makes the US a more attractive place for international investors to park their money. If inflation falls below 2% or the unemployment rate is too high, the Fed can cut interest rates to encourage borrowing, weighing on the greenback.

The Federal Reserve (Fed) holds eight monetary policy meetings per year, at which the Federal Open Market Committee (FOMC) assesses the economic situation and makes monetary policy decisions. Twelve Fed officials take part in the FOMC – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York and four of the remaining eleven presidents of the regional Reserve Bank, whose terms of office are one-year.

In extreme situations, the Federal Reserve may resort to a policy called 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 in times of crisis or when inflation is extremely low. It was the Fed's weapon of choice during the Great Financial Crisis of 2008. The Fed prints more dollars and uses it to buy high-quality bonds from financial institutions. QE usually weakens the US dollar.

Quantitative tightening (QT) is the reverse process of quantitative easing, in which the Federal Reserve stops purchasing bonds from financial institutions and does not reinvest the capital of the bonds it holds at maturity to create new bonds buy. Usually it is positive for the value of the US dollar.

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

Vacancies figures will be released on Tuesday at 2:00pm 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 be short-lived as investors do not hold large positions ahead of the third quarter gross domestic product (GDP) data release and the October employment report, which will be published on Thursday and Friday respectively.

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

“On the positive side, 1.0870 (Fibonacci 23.6% retracement level of the October downtrend, 200-day SMA) represents the key resistance.” If EUR/USD rises above this level and starts to consider it as support use, 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 found at 1.0770 (downtrend end point) ahead of 1.0700 (round level) and 1.0620 (April static level).”

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