United States job openings are expected to fall to 7.5 million in March, down only slightly. This statistic will be released by the US Bureau of Labor Statistics (BLS) on Tuesday at 14:00 GMT as part of the Job Openings and Labor Turnover Survey (JOLTS). This new publication will provide a valuable glimpse into the quickly adapting local labor market. This move follows a months-long decline in job openings, which reached a record high of 12 million in March 2022.
Our reporting will focus on data tracking through the end of March, providing an important look at the new employment reality as it emerges. The forthcoming official Employment report, due for release on Friday, will measure data for April, allowing analysts to compare job openings with recent employment trends.
Reasons to be worried about a looming labor market cooldown have been sounded by some Federal Reserve apparatchiks. As an example, Minneapolis Fed President Neel Kashkari has made his discomfort with layoffs known, blaming them on the confusion wrought by trade wars. His concerns were part of a larger fear within the economic community about outside forces counteracting any attempts to create more stable employment.
Declining Job Openings Trend
Job openings have been on a downward trajectory for nearly a year now. In January, there were over 7.7 million jobs open to be filled. By the month of February, this figure already fell below 7.6 million. Analysts like Eren Sengezer expect March to keep up this trend with a forecast of 7.5 million openings.
The upcoming BLS report will surely emphasize this dramatic decrease. Additionally, going forward it will be an important baseline measure for economists keeping an eye on labor market trends. An uptick in job openings, especially if it goes back over 8 million, might indicate a healthier labor market. The current forecast indicates that the labor market may be cooling, prompting further scrutiny from policymakers and investors alike.
Christopher Waller, member of the Federal Reserve Board, cautioned against some of the unintended outcomes economic pressures on job quality can have.
“The easiest place to offset tariff costs is by cutting payrolls.” – Christopher Waller
This statement highlights just how big of a cliff it could be for so many businesses as they deal with increased costs and an unpredictable economy.
Implications for Policy and Currency
Wall Street market analysts and investors will be paying special attention to the next JOLTS report. This report will undoubtedly have a large impact on the Federal Reserve’s upcoming monetary policy decisions. A potential upside surprise in job openings could have a positive impact as US dollar bullish catalyst. Investors could begin pricing in yet another policy hold beyond the Fed’s May meeting.
There’s currently a debate taking place within the Federal Reserve and in other government economic circles over how best to ensure long-term economic balance. The relationship between job openings and inflation rates is an important one. As we saw with the CPI surprise in September, any major miss from these expectations can strongly affect future monetary policy.
The markets will additionally be watching currency movements carefully as the JOLTS data hits. With recent fluctuations in the EUR/USD currency pair, analysts note that it currently maintains a bullish stance despite losing some momentum.
“EUR/USD clings to a bullish stance but loses momentum, with the Relative Strength Index (RSI) indicator on the daily chart declining to the 60 region.”
This ever-evolving analysis highlights just how deeply interconnected a state’s or region’s job market data is with currency valuations and overall economic health.
Looking Ahead
The markets are looking to Tuesday’s JOLTS report. So all of this leads to everyone’s obsessive focus on how the job opening figures are going to line up with expectations. Even the slightest miss against these forecasted numbers can set off speculation about changes in Federal Reserve policy. This, in turn, has direct and immediate consequences for the US dollar.
The July official Employment report is officially released Friday at 830am. It will be one of the first indicators to quantify the impact of April on employment data and provide a more accurate picture of labor market conditions. Investors and analysts across the globe are acutely focused on this next set of reports as they will be critical in informing perceptions of our economy’s trajectory.