Job Openings and Labor Turnover Survey (JOLTS): Trading Guide
Table of Contents
Understanding JOLTS
The Job Openings and Labor Turnover Survey (JOLTS) is a monthly report published by the Bureau of Labor Statistics (BLS) that provides detailed data on job openings, hires, and separations in the US economy.
JOLTS has become increasingly important for forex traders because the Federal Reserve specifically monitors this data to gauge labor market tightness and wage pressure risks.
Unlike the monthly employment report which focuses on jobs created, JOLTS provides insight into labor market dynamics - how many positions are available, how many workers are being hired, and how many are leaving their jobs.
Why JOLTS Matters
- Labor demand indicator: Job openings show employer demand for workers
- Wage pressure signal: High openings relative to unemployed suggest wage inflation
- Economic confidence: Quits rate reflects worker confidence in finding new jobs
- Fed watch metric: Explicitly monitored by Federal Reserve officials
Key Components
The JOLTS report contains several important metrics that traders should monitor:
Job Openings
The headline number showing unfilled positions across the economy:
- Total openings: Number of job vacancies on the last business day of the month
- Openings rate: Job openings as a percentage of total employment plus openings
- Sector breakdown: Openings by industry sector
- Historical comparison: Compare to pre-pandemic levels for context
Hires and Separations
- Hires: Number of additions to payroll during the month
- Total separations: Employees leaving their jobs (voluntary and involuntary)
- Quits: Voluntary separations initiated by employees
- Layoffs and discharges: Involuntary separations initiated by employers
The quits rate is particularly important. A high quits rate indicates workers are confident about finding better opportunities - a sign of a strong labor market that could fuel wage growth.
Key Ratios
- Job openings to unemployed ratio: How many openings per unemployed worker
- Quits rate: Quits as a percentage of total employment
- Hires rate: Hires as a percentage of total employment
Trading the JOLTS Report
JOLTS is released approximately 5 weeks after the reference month, making it a lagging but comprehensive look at labor market dynamics.
Release Schedule
- Time: 10:00 AM EST on release day
- Frequency: Monthly, typically first or second week of the month
- Lag: Data is approximately 5 weeks old when released
- Revisions: Previous months are often revised
Trading Strategy
- Check consensus: Know the expected job openings number
- Compare to trend: Is the labor market tightening or loosening?
- Watch the quits rate: Changes signal worker confidence shifts
- Consider Fed context: How does this affect rate expectations?
JOLTS typically has moderate market impact compared to NFP, but surprises can move USD significantly, especially when Fed is focused on labor market conditions.
Market Reactions
- Higher than expected openings: USD bullish (tight labor market, hawkish Fed)
- Lower than expected openings: USD bearish (cooling labor market, dovish Fed)
- Rising quits rate: USD bullish (wage pressure risk)
- Falling quits rate: USD bearish (workers less confident)
Fed Policy Implications
The Federal Reserve closely monitors JOLTS data as part of its dual mandate assessment:
Labor Market Tightness
The ratio of job openings to unemployed workers is a key Fed metric:
- Above 1.5: Very tight labor market, inflation risk elevated
- Around 1.0: Balanced labor market, typical of full employment
- Below 0.5: Slack in labor market, less wage pressure
Wage Inflation Risks
High job openings combined with a high quits rate suggests:
- Workers have bargaining power: Can demand higher wages
- Competition for talent: Employers must raise pay to attract workers
- Wage-price spiral risk: Higher wages feed into higher prices
Fed Chair Powell has specifically cited the job openings to unemployed ratio as a metric for assessing labor market conditions. Pay attention when this ratio changes significantly.
Understanding JOLTS data helps traders anticipate Fed policy shifts and position accordingly in forex markets. While not as immediately market-moving as NFP, JOLTS provides crucial context for the labor market picture that influences Fed decisions.
