On Wednesday, the U.S. Bureau of Labor Statistics (BLS) unveil the Job Openings and Labor Turnover Survey (JOLTS), offering a critical look at shifts in the number of job vacancies during the month of September, as well as the figures on layoffs and resignations. Market participants and Federal Reserve (Fed) policymakers are closely monitoring this data, recognizing its capacity to provide invaluable insights into the dynamics of labor market supply and demand, which, in turn, play a crucial role in driving wage growth and inflation.
Anticipations for the JOLTS Report:
Expectations indicate that the number of job vacancies is likely to decrease, settling at around 9.25 million on the last working day of September. In the preceding August report, the Bureau of Labor highlighted that “for the month, hiring and total separations were little changed at 5.9 million and 5.7 million, respectively.” Furthermore, the report stated, “Of the separations, resignations (3.6 million) and total separations were The number of layoffs and layoffs (1.7 million) was little changed.”
August witnessed a notable surge in job vacancies, rising to 9.6 million, following a steady decline from 10.3 million to 8.9 million between April and July. This unanticipated increase, along with a substantial rise in nonfarm payrolls by 336,000 in September, underscores the enduring tightness of the U.S. labor market.
This prevailing tight labor market dynamic comes in the wake of the revised Summary of Economic Forecasts for September, which revealed that a majority of Fed policymakers believe one more policy rate increase is appropriate by year-end. However, an increase in Treasury yields since the September policy meeting has rekindled expectations that the Fed may opt to maintain policy rates unchanged in 2023 within a range of 5.25% to 5.5%. According to CME Group’s FedWatch Tool, market participants currently assign a 20% probability to the U.S. central bank raising policy rates in December.
Market Analyst Eren Sengezer of FXStreet comments on JOLTS job vacancy data and its potential impact:
“The release of JOLTS job openings data is usually scheduled for Tuesdays; however, this time it is slated for Wednesday, arriving after the ADP private sector employment report and just hours before the Federal Reserve’s release of monetary policy. Concurrently, the ISM will also issue the Manufacturing Purchasing Managers People Index report. Consequently, the market reaction to job vacancies may be short-lived, and taking positions based solely on this data may entail risks.”
When Can You Expect the JOLTS Report and Its Potential Impact on EUR/USD?
The JOLTS job vacancy data is expected to be disclosed at 22:00 Beijing time. Eren Sengezer points out the critical technical levels for EUR/USD ahead of the JOLTS data release:
“Amidst a flurry of data releases, investors are likely to await the Fed’s policy decision before committing to significant positions. Nevertheless, the 50-day simple moving average (SMA) of EUR/USD constitutes an initial resistance at 1.0650, with key technical levels to watch including 1.0750 (the 38.2% Fibonacci retracement of the July-October decline) and 1.0800 (100-day moving average, 200-day moving average). On the downside, 1.0500 (psychological price level) is the first support level, followed by 1.0450 (the end of the decline) and 1.0400 (psychological, static).”
