USD Tumbles on Another Soft JOLTS Jobs Figures
The USD has been bullish on hawkish FED rhetoric, but it reversed yesterday, losing 100 pips after another slowdown in JOLTS job openings
The week started slow on Monday, but yesterday we had the JOLTS job opening report showing some soft numbers for August, along with downward adjustments to the figures for July. The labour market has been one of the few sectors holding up in the US economy, and the Federal Reserve has been requiring evidence of a less robust jobs market to feel assured that the economy can’t hold any more rate hikes. Yesterday’s report signified a step in the direction toward achieving that goal.
Job openings have now returned to levels that were last observed in the summer of 2021, and they are not too distant from the levels seen before the coronavirus. It is quite likely that we might observe additional weakness in the coming months, which could play a role in creating a less heated jobs market and maintaining consistent pressure in wage growth.
The US dollar experienced a bearish reversal after the release of the JOLTS report, which revealed the disappearance of more than 700,000 job openings during the last month. The jobs market is beginning to show signs of reduced competitiveness, and the decrease in Consumer Confidence has exacerbated the situation. As a result, traders are now feeling tense and anxious in anticipation of the upcoming US jobs report scheduled for Friday, although we have the ADP report later today. EUR/USD surged more than 100 pips higher as it approached 1.09, while GBP/USD climbed around 90 pips.
JOLTs Job Openings Report for July 2023
- JOLTs job openings for July 8.827M versus 9.465M estimate
- Prior report 9.582M revised down to 9.165M
Job Openings:
- Job openings 8.827M versus 9.465M estimate. This is the smallest since March 2021.
- Professional and business services -198K
- Healthcare and social assistance -130K
- State and local government excluding education -67K
- State and local government education -62K
- Federal government -27K
- information +101K
- transportation, warehousing, and utilities +70 5K
Hires:
- Hires 5.773M vs 5.940M last month
Separations including quits, layoffs, and discharges, and other separations:
- Total separations 5.483M versus 5.691M last month
- Quits decreased to 3.549 million (-253K) versus 3.802M last month
Resignations, commonly referred to as quits, are typically initiated by employees themselves, signifying a voluntary separation from their jobs. Consequently, the quits rate can serve as an indicator of the workforce’s willingness or ability to move on from their current employment. Layoffs and discharges, on the other hand, entail involuntary separations initiated by employers. Additional forms of separation encompass retirements, deaths, disabilities, and transfers to different locations within the same company.
The available data indicates a further decrease in economic activity. Notably, job openings have hit their lowest point since March 2021. In addition, there has been a reduction in the number of hires, and the quits rate has also seen a decline (-253K). A decrease in the quits rate suggests that employees are now less inclined to leave their current jobs, possibly indicative of diminished confidence in swiftly securing new employment opportunities.
It’s worth noting that the data provided is somewhat outdated, relating to July. There is ongoing speculation that its reliability might be compromised. The forthcoming US nonfarm payroll data is scheduled for release on Friday, with expectations projecting a gain of 169K jobs (in contrast to the 187K reported last month). The unemployment rate is predicted to remain stable at 3.5%, a level that remains close to historical lows.
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