JOLTS Jobs Resume Slowdown – USD Lower As Vacancies Fall

The U.S. dollar tumbled lower as job opportunities continued their downward trend, signaling further deterioration in the U.S. labor market.

Skerdian Meta•Wednesday, September 4, 2024•2 min read

The U.S. dollar tumbled lower as job opportunities continued their downward trend, signaling further deterioration in the U.S. labor market. JOLTS job openings fell to their lowest level since early 2021 in July, highlighting increasing challenges in the labor market. The Federal Reserve, which had previously focused on controlling inflation, has now turned its attention to the weakening employment landscape, with Fed Chair Jerome Powell emphasizing at the Jackson Hole Symposium that the central bank does not want to see additional softness in the job market, yet the latest data suggests that labor supply is shrinking.

US jobs sector continues to display weakness this year

This development has heightened the chances of a 50 basis point rate cut in September, with current market pricing reflecting a 46% probability of a half a percentage point cut and a 54% chance of a 0.25% rate cut. Following the release of the weak jobs data, the U.S. dollar dropped sharply, shedding about 30-50 pips across various currency pairs. However, the outlook could shift further with Friday’s non-farm payroll (NFP) employment report, so the USD selling has stopped right now as traders move to the sidelines.

JOLTs Job Openings for July 2024

Job openings 7.673M. Lowest since Feb 2021
Prior month 8.184M (was expecting 8.000M) revised lower 7.910M
vacancy rate 4.6% versus 4.8% last month revised from 4.9%
Quits rate 2.1% versus 2.0% last month (revised from 2.1%).
Separations rate 3.2% versus 3.2% last month

Details:

JOLTS Employment Report Summary for July

Total job openings: 7.7 million, rate 4.6%
Decreased by 1.1 million year-over-year
Decreased in:
- Health care and social assistance: -187,000
- State and local government, excluding education: -101,000
- Transportation, warehousing, and utilities: -88,000
Increased in:
- Professional and business services: +178,000
- Federal government: +28,000

Hires:
- Total hires: 5.5 million, rate 3.5%
- Increased in accommodation and food services: +156,000
- Decreased in federal government: -8,000
Total Separations: Separations are increasing
- Total separations increased to 5.4 million (+336,000), rate 3.4%
- Increased in health care and social assistance: +108,000
Quits: People are not quitting
- Total quits unchanged at 3.3 million, rate 2.1% vs 2.0% last month
- Down by 338,000 year-over-year.
- Increased in information: +16,000
Layoffs and Discharges:
- Total layoffs and discharges: 1.8 million, rate 1.1%
- Increased in accommodation and food services: +75,000
- Increased in finance and insurance: +21,000
Other Separations:
- Increased to 381,000 (+71,000)

Feds Waller did say if the vacancy rate fell below 4.5% it would indicate that the slacking labor is being absorbed. The vacancy rate fell to 4.6% from 4.8% last month.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.