-
The US JOLTS data will be closely monitored ahead of Friday's March employment report.
-
Job openings are expected to decrease to around 7.63 million in February.
-
The condition of the labor market plays a crucial role in the Fed's policy decisions.
The Job Openings and Labor Turnover Survey (JOLTS) will be released by the U.S. Bureau of Labor Statistics (BLS) on Tuesday, providing data on job openings, layoffs, and quits for February. This report is closely analyzed by market participants and Federal Reserve (Fed) policymakers as it offers insights into labor market supply and demand, which influences wages and inflation. Job openings have been steadily declining since surpassing 12 million in March 2022, signaling a cooling labor market. By September 2024, job openings dropped to 7.44 million, the lowest since January 2021, before rising to 7.8 million in October and 8.09 million in November. At the end of 2024, job openings were at 7.5 million, rebounding to 7.74 million in January.
For the upcoming JOLTS report, markets expect a slight decline in job openings to 7.63 million for February. The Fed's March policy meeting highlighted that the unemployment rate remains low and labor market conditions are solid, with the Summary of Economic Projections (SEP) showing a projected 4.4% unemployment rate by the end of 2025. In his post-meeting remarks, Fed Chairman Jerome Powell emphasized that the labor market is broadly balanced.
It is important to note that while the JOLTS data refers to February, the official March Employment Report will be released on Friday. Additionally, markets may be cautious about taking large positions ahead of U.S. President Donald Trump's announcement on Wednesday regarding new tariff details.
In February, Nonfarm Payrolls (NFP) increased by 151,000, missing the market forecast of 160,000. According to the CME FedWatch Tool, there is less than a 20% chance of a 25 basis points (bps) rate cut in May. Although the JOLTS report is unlikely to shift the Fed's rate outlook, a significant negative surprise—such as job openings falling below 7 million—could weigh on the U.S. Dollar (USD). Conversely, if the data exceeds expectations, the USD may not have much room to rise, based on current market positioning.
The January JOLTS report showed hires holding steady at 5.4 million, while total separations remained unchanged at 5.3 million. Within separations, the number of quits was 3.3 million, and layoffs and discharges stood at 1.6 million, with little change.
