US JOLTS Job Openings decline to 7.67 million in July vs. 8.1 million expected
- US JOLTS Job Openings declined further in July.
- US Dollar Index stays in negative territory below 101.50.
The number of job openings on the last business day of July stood at 7.67 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday. This reading followed the 7.9 million openings (revised from 8.1 million) reported in June and came in below the market expectation of 8.1 million.
"Over the month, hires changed little at 5.5 million," the BLS noted in its press release. "Separations increased to 5.4 million. Within separations, quits (3.3 million) and layoffs and discharges (1.8 million) changed little."
Market reaction to US JOLTS Job Openings data
The US Dollar came under renewed selling pressure following this data. At the time of press, the US Dollar Index was down 0.44% on the day at 101.33.
Employment FAQs
Labor market conditions are a key element in assessing the health of an economy and thus a key driver for currency valuation. High employment, or low unemployment, has positive implications for consumer spending and economic growth, boosting the value of the local currency. Moreover, a very tight labor market – a situation in which there is a shortage of workers to fill open positions – can also have implications on inflation levels because low labor supply and high demand leads to higher wages.
The pace at which salaries are growing in an economy is key for policymakers. High wage growth means that households have more money to spend, usually leading to price increases in consumer goods. In contrast to more volatile sources of inflation such as energy prices, wage growth is seen as a key component of underlying and persisting inflation as salary increases are unlikely to be undone. Central banks around the world pay close attention to wage growth data when deciding on monetary policy.
The weight that each central bank assigns to labor market conditions depends on its objectives. Some central banks explicitly have mandates related to the labor market beyond controlling inflation levels. The US Federal Reserve (Fed), for example, has the dual mandate of promoting maximum employment and stable prices. Meanwhile, the European Central Bank’s (ECB) sole mandate is to keep inflation under control. Still, and despite whatever mandates they have, labor market conditions are an important factor for policymakers given their significance as a gauge of the health of the economy and their direct relationship to inflation.
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