Better JOLTS Jobs Don’t Change the Downward Trend, Leaving the DXY Index Bearish Today
The US JOLTS job report was the main forex release for the day, but it failed to help the US dollar, after posting an improvement in November.
US employment has been one of the strongest sectors of the US economy during the last few years which have been tough, but started to weaken earlier in 2024, however, most reports have shown a considerable improvement in recent months. Yet, the JOLTS job openings is still on a downward trend. It has been declining for more than two years, and today’s improvement is merely a bump, unless it is followed by more positive reports in the coming months.
Key Highlights from the US JOLTS Report
- Job Openings:
- November job openings came in at 7.744M, surpassing expectations of 7.475M.
- Previous month’s figure was revised down from 7.443M to 7.372M.
- Indicates continued demand for labor, despite signs of a cooling job market.
- Vacancy Rate:
- Rose to 4.6% from 4.5% in the prior month, showing slight tightening in the labor market.
- Quits Rate:
- Increased to 2.1% from 1.9% last month.
- Suggests that worker confidence in finding new employment opportunities remains resilient.
- Hires:
- Declined to 3.3%, down from 3.5%, indicating slower recruitment activity.
- Separations Rate:
- Remained steady at 3.3%, signaling stability in overall workforce turnover.
Extended Observations
- Demand for Labor:
- The robust job openings figure underscores ongoing employer demand for skilled workers despite broader economic challenges.
- Sectors such as healthcare and technology may be driving these numbers, reflecting sector-specific resilience.
- Quits Rate as a Confidence Indicator:
- The rise in the quits rate highlights employee optimism about finding better opportunities or negotiating higher wages.
- However, sustained increases could signal mounting pressure on employers to offer competitive packages.
- Hires and Separations:
- The drop in hiring rate might indicate cautiousness among employers amid economic uncertainties.
- A flat separations rate suggests that layoffs are not yet a major factor in the labor market dynamics.
The latest JOLTS report paints a mixed picture of the US labor market. While job openings remain robust and quits are on the rise, the decline in hiring suggests caution among employers as economic uncertainties loom. This dual narrative of steady demand but restrained hiring indicates a labor market transitioning from a period of rapid expansion to stabilization. Policymakers and businesses will likely monitor these trends closely, as they reflect the broader health of the economy and its ability to weather upcoming challenges.
USD Index DXY Chart H4 – The 20 SMA Holding As Resistance
The USD jumped 20 pips higher after the report, but was unable to start a bullish trend, or even keep the gains as it continues to retreat on the day. There were a couple of FOM members speaking as well, who didn’t sound particularly dovish, but that didn’t help the US dollar either which continues to slide.
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