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JOLTS vacancies increase to 7.74 million in October, compared to forecast of 7.48 million

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JOLTS vacancies increase to 7.74 million in October, compared to forecast of 7.48 million

The number of vacancies on the last working day of October was 7.74 million, the US Bureau of Labor Statistics (BLS) reported on Tuesday in the Job Openings and Labor Turnover Survey (JOLTS). This followed 7.37 million openings in September and exceeded market expectations of 7.48 million.

“Over the month, the workforce changed little at 5.3 million. Total divorces changed little at 5.3 million,” the BLS said in its news release. “Within divorces, the number of layoffs (3.3 million) increased, but the number of layoffs and layoffs (1.6 million) changed little.”

Market response to JOLTS job vacancy data

The US Dollar Index recovered slightly from session lows following this data, last losing 0.07% on the day at 106:30.

PRICE in US dollars today

The table below shows the percentage change of the US dollar (USD) against the major quoted currencies today. The US dollar was weakest against the Japanese yen.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.06% -0.00% -0.36% 0.06% 0.04% 0.14% -0.10%
EUR 0.06% 0.05% -0.30% 0.12% 0.09% 0.20% -0.05%
GBP 0.00% -0.05% -0.34% 0.07% 0.04% 0.14% -0.10%
JPY 0.36% 0.30% 0.34% 0.39% 0.35% 0.44% 0.21%
CAD -0.06% -0.12% -0.07% -0.39% -0.03% 0.07% -0.17%
AUD -0.04% -0.09% -0.04% -0.35% 0.03% 0.10% -0.14%
NZD -0.14% -0.20% -0.14% -0.44% -0.07% -0.10% -0.25%
CHF 0.10% 0.05% 0.10% -0.21% 0.17% 0.14% 0.25%

The heatmap shows percentage changes of the major currencies against each other. The base currency is chosen from the left column, while the quote currency is chosen from the top row. For example, if you choose the US dollar from the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent USD (base)/JPY (quote).

This section below is published as a sample of US JOLTS vacancy data at 09:00 GMT.

  • The US JOLTS data will be closely watched ahead of the release of the November employment report on Friday.
  • The number of vacancies in October is expected to remain below 8 million.
  • The state of the labor market is a key factor for Fed officials in setting policy.

The Job Openings and Labor Turnover Survey (JOLTS) will be released Tuesday by the U.S. Bureau of Labor Statistics (BLS). The publication will provide data on the change in the number of vacancies in October, in addition to the number of layoffs and terminations.

JOLTS data is scrutinized by market participants and Federal Reserve (Fed) policy makers because it can provide valuable insights into supply-demand dynamics in the labor market, a key factor affecting salaries and inflation. The number of vacancies has fallen steadily since surpassing 12 million in March 2022, indicating a steady cooling in labor market conditions. In September, the number of jobs fell to 7.44 million, the lowest figure since January 2021.

What can you expect in the next JOLTS report?

The markets expect that there will be approximately 7.5 million vacancies on the last working day of October. Federal Reserve (Fed) policymakers made clear after the July policy meeting that they are shifting their focus to the labor market, given encouraging signs that inflation is retreating toward the central bank’s target.

It’s important to note that while the JOLTS data covers the end of October, the official employment report, which is released Friday, measures data for November.

In October, nonfarm payrolls (NFP) increased by only 12,000 as hurricanes and labor strikes significantly affected hiring. Commenting on the US employment situation, “the labor market is close to stable, full employment,” said Austan Goolsbee, president of the Federal Reserve (Fed) Bank of Chicago. “It may make sense to slow the pace of rate cuts as the Fed moves closer to the point where rates will stabilize,” he added, saying he takes more comfort in the fact that they are not “collapsed at full employment .”

The CME FedWatch Tool currently shows that markets are pricing in about a 65% probability of a further 25 basis points (bps) rate cut in December. Should there be a positive surprise in job openings, worth 8 million or more, the immediate reaction could boost the US dollar (USD) as investors reassess the likelihood of a rate cut in December. On the other hand, a disappointing rate at or below 7 million could hurt the USD.

“Over the month, hiring was little changed at 5.6 million. Total separations were unchanged at 5.2 million,” the BLS noted in its September JOLTS report. “Within separations, layoffs (3.1 million) and layoffs and layoffs (1.8 million) changed little.”

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

The vacancy numbers will be published on Tuesday at 15:00 GMT. Eren Sengezer, European Session Lead Analyst at FXStreet, shares his views on the potential impact of JOLTS data on EUR/USD:

“Unless there is a significant difference between market expectations and actual figures, the market reaction to the JOLTS data is likely to remain short-lived, with investors refraining from taking large positions ahead of the highly anticipated November labor market data. published on Friday.”

“The near-term technical outlook for EUR/USD suggests that the bearish bias remains intact. The Relative Strength Index (RSI) indicator on the daily chart remains well below 50, and the pair continues to trade below the 20-day Simple Moving Average (SMA).”

“On the upside, 1.0600 (Fibonacci 23.6% retracement level of the October-December downtrend, 20-day SMA) is a key resistance. If the EUR/USD breaks above this level and starts using it as support, technical buyers can take action. In this scenario, 1.0700 (Fibonacci 38.2% retracement) could be seen as the next hurdle before 1.0800 (Fibonacci 50% retracement, 50 day SMA). Looking south, first support could be observed at 1.0400 (end of the downtrend) before 1.0330 (November 22 low) and 1.0300 (static level, around level).

Frequently asked questions about US dollars

The United States 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 banknotes. It is the most traded currency in the world, accounting for more than 88% of all global currency turnover, or an average of $6.6 trillion in transactions per day, according to 2022 data. After World War II, 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 disappeared.

The most important factor affecting the value of the US dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: achieving price stability (controlling inflation) and promoting full employment. The most important tool to achieve these two goals is adjusting interest rates. When prices rise too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which boosts the value of the USD. If inflation falls below 2% or the unemployment rate is too high, the Fed can cut rates, which weighs on the greenback.

In extreme situations, the Federal Reserve can also print more dollars and implement quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stalled financial system. It is a special policy measure used when credit has dried up because banks no longer want to lend to each other (for fear of the counterparty defaulting). It is a last resort when simply lowering interest rates is unlikely to achieve the desired results. 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, mainly from financial institutions. QE generally leads to a weaker US dollar.

Quantitative tightening (QT) is the reverse process in which the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal of the bonds it holds that are maturing in new purchases. It is generally positive for the US dollar.

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