- The US Jolts data will be observed closely before the publication of the April Employment Report on Friday.
- Employment offers are expected to decrease to 7.5 million in March.
- The state of the labor market is a key factor for Fed officials.
The Employment and Work Rotation Survey (Jolts) will be published on Tuesday by the United States Labor Statistics Office (BLS). The publication will provide data on the change in the number of job offers in March, together with the number of layoffs and resignations.
Jolts data are analyzed by market participants and those responsible for the Federal Reserve monetary policy (FED) because they can provide valuable information about the dynamics of supply and demand in the labor market, a key factor that impacts wages and inflation. Employment offers have been constantly decreasing since they reached 12 million in March 2022, indicating constant cooling in labor market conditions. In January, the number of job offers was exceeding 7.7 million before falling below 7.6 million in February.
What to expect in the next Jolts report?
Markets expect employment offers to go to 7.5 million on the last business day of March. With the growing uncertainty about the possible impact of the commercial policy of the president of the USA Donald Trump in the economic and inflationary perspectives, those responsible for the monetary policy of the Federal Reserve have expressed their concerns about a cooling in the labor market.
The president of the Fed of Minneapolis, Neel Kashkari, said last week that companies can begin to fire workers due to the uncertainty caused by commercial friction. In a similar note, the governor of the Fed, Christopher Waller, told Bloomberg that he would not be surprised to see more dismissals and an increase in unemployment. “The easiest place to compensate for tariff costs is reducing payroll,” Waller explained.
It is important to note that the Jolts report refers to the end of March, while the Official Employment Report, which will be published on Friday, measures April data. Regardless of nature lagged with Jolts data, a significant decrease in the number of job offers could feed fears on a weakening of the labor market. In this scenario, the US dollar (USD) is likely to face a renewed sales pressure with the immediate reaction.
On the other hand, an abrupt increase, with a reading above 8 million, could suggest that the labor market remains relatively stable. The CME Fedwatch tool shows that the markets do not expect the FED to reduce the policy rate at the next policy meeting in May, while they value a probability of almost 60% of a reduction of 25 basic points (PBS) in June. Therefore, the market position suggests that a positive surprise could support USD by making investors lean towards another pause in politics after May.
When will the Jolts report be published and how could it affect the EUR/USD?
Employment offers will be published on Tuesday at 14:00 GMT. Eren Sengezer, principal analyst of the European session at FXSTERET, shares its technical perspective for the EUR/USD:
“The EUR/USD clings to an upward posture but loses impulse, with the indicator of the Relative Force Index (RSI) in the daily graph of 38% of Fibonacci) and 1.1000 (static level, round level).
“Looking north, the first level of resistance could be found in 1,1400 (static level) before 1,1500 (round level, static level) and 1,1575 (maximum of April 21).”
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
