US Jobs Improving As Jolts Job Openings Resumes Growing Trend

Markets crashed in early August as US jobs took a dive after slowing throughout Q1 and Q2 of 2024, but it seems like the labor market is back on track now. The JOLTS jobs employment data showed another increase, the third one in the last four months, which shows that the trend is still improving.

The US Dollar has been beaten up since early August and the decline escalated against all major currencies after the 50 BPS rate cut by the FED two weeks ago. But, yesterday the buck made a reversal, helped by Jerome Powell’s comment which indicated that the FED doesn’t want another 50 bps rate cut in the November meeting, which boosted the USD further.

Geopolitical Conflict in Middle East Supporting the USD

Today the sentiment seems to have turned negative, with the risk of a war in the Middle East, after the Israeli army’s entrance in Lebanon, which might pull Iran into the conflict. That has sent most major currencies down against the USD, which is benefiting from the negative sentiment, while the JOLTS job openings came above expectations, helping keeping the USD supported as well.

Job openings exceeded expectations, rising to 8.040M in August, while quits and separations rates saw slight declines. Hiring remains stable, and notable increases were seen in construction and professional services job openings. Despite fewer annual openings, the labor market remains robust.

JOLTS Job Openings Report: August

• Job openings: 8.040M vs. 7.660M expected
• Prior month revised up to 7.711M (from 7.673M)
• Vacancy rate: 4.8% (up from 4.6%)
• Quits rate: 1.9% (down from 2.0%)
• Separations rate: 3.1% (down from 3.2%)

Details:

• Annual comparison: 1.3 million fewer openings than last year
• Increases in job openings:
  • Construction: +138,000
  • Local government: +78,000
• Decreases in job openings:
  • Other services: -93,000

US Hires in August:

• Hires: 5.3 million (no change)
• Hire rate: 3.3% (no change)

Total Separations:

• Separations: 5.0 million (no change)
• Rate: 3.1% (down from 3.2%)
• Increases: Professional/business services: +149,000
• Decreases: Accommodation/food services: -111,000; state/local government: -25,000

Quits:

• Quits: 3.1 million (-159,000)
• Quits rate: 1.9% (no change)
• Decreases: Transportation/warehousing/utilities: -45,000; arts/entertainment/recreation: -18,000; private education: -11,000

Layoffs/Discharges:

• Layoffs: 1.6 million (no change)
• Rate: 1.0% (no change)
• Decrease: Healthcare/social assistance: -52,000

Other Separations:

• 304,000 (no change)

The data indicates a slight drop in both overall separations and quits, while layoffs and discharges remained steady. Earlier, Fed Governor Waller mentioned that if the vacancy rate fell below 4.5%, it would signal that the labor market was tightening. Last month, the rate dipped to 4.6% from 4.8%, but this month it has climbed back to 4.8%. This suggests that concerns about employment pressures have eased for now.