US JOLTS Job Openings expected to show strong labor demand, endorsing Fed rate hike bets

US JOLTS are forecast to have eased to 7.3 million in May, yet remaining above the 2025 average.
Job Openings data will be watched to confirm market expectations of Federal Reserve rate hikes.
EUR/USD remains on the defensive, with 13-month lows at a relatively short distance.

The US Bureau of Labor Statistics will release the Job Openings and Labor Turnover Survey (JOLTS) for May on Tuesday at 14:00 GMT. The report, which gathers US employers’ estimates of job openings, hires, and separations nationwide, is closely watched by the market as it normally comes ahead of an array of employment gauges released throughout the week, culminating in the key Nonfarm Payrolls report.

May’s JOLTS figures are likely to be closely watched on Tuesday because they come in a crucial moment, with markets repricing chances of interest rate hikes by the US Federal Reserve (Fed) as inflation keeps rising well above the central bank’s target.

A high level of uncertainty surrounds the Middle East conflict, and inflationary pressures have failed to abate despite the recent decline in Crude prices. The Fed has reiterated its commitment to fight inflation, boosting investors’ hopes of at least one rate hike this year. In this scenario, this week’s labour market data might be key to assessing the timing of the next monetary policy move and give a fresh boost to US Dollar (USD) volatility.

What to expect in the next JOLTS report?

Job openings are expected to come in at 7.3 million in May, according to the market consensus. This is a moderate decline from April’s 7.61 million openings, which was the best reading since July 2024, but still a good reading, as it remains significantly above the 2025 average of 7.08 million openings. If these figures are confirmed, they are likely to endorse the theory of a stabilising US labour market and underpin the narrative of US economic exceptionality.

April’s JOLTS data beat expectations with a 4.6% monthly increase in job openings – 731,000 new vacancies – from March’s 6.88 million openings, while quits, layoffs, and discharges were little changed.

Beyond that, the US Nonfarm Payrolls release reported 172K new jobs in May, completing an impressive performance in the three months to May. These figures boosted market confidence about the US economic resilience to the Middle East war and allowed Fed policymakers to forget about the labor market and focus solely on the overshooting inflationary levels to draw their near-term monetary policy. This new scenario has prompted investors to ramp up bets of some monetary policy tightening in the coming months.

Fed target rate probabilities July 2026 — Source: CME Group's FedWatch Tool

Data from the CME Group’s Fedwatch Tool shows that futures markets are pricing a 30% chance of a rate hike at next month’s Federal Open Market Committee (FOMC) meeting, and a more than 60% chance of monetary tightening in September, up from 6% and 20% respectively a month ago. This week’s employment figures will be analysed to contrast these views.

When will the JOLTS report be released and how could it affect EUR/USD?

Job Openings will be published on Tuesday at 15:00 GMT. The EUR/USD is trading at a relatively short distance from the 13-month lows, on track to a 2.17% sell-off in June, and a nearly 3% decline over the last two months.

Guillermo Alcalá, analyst at FXStreet, sees the pair skewed to the downside while the US economy keeps outperforming the Eurozone’s and Iran’s war keeps dampening risk appetite: “The Euro has remained vulnerable over the last two months amid geopolitical woes and a sluggish economic growth in the Eurozone. Unless the scenario changes significantly, Euro rallies are likely to offer good entry opportunities for sellers. The 13-month low at 1.1325 remains the key support level. Further down, bears might be tempted to revisit the late May 2025 low at 1.1210.”

To the upside, Alcala sees the 1.1500 and the 1.1620-1.1640 resistance areas as the main hurdles for bulls: “The pair is struggling to consolidate above 1.1400 at the time of writing in a rebound from the mentioned 13-month lows, which, so far, seems corrective. Bulls should break the 1.1500 area (June 8,11 lows) and preferably also the area between 1.1620 and 1.1640, where late May and early June highs meet the descending trendline from the year-to-date (YTD) highs, to break the negative structure.”

Employment FAQs

How do employment levels affect currencies?

Labor market conditions are a key element to assess 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 thus 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 and thus monetary policy as low labor supply and high demand leads to higher wages.

Why is wage growth important?

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.

How much do central banks care about employment?

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 its significance as a gauge of the health of the economy and their direct relationship to inflation.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.