Strong JOLTs Job Openings Report Shows Fed Is Forced To Be More Aggressive

Key Insights

• JOLTs Job Openings data for January exceeded analyst consensus at 10.82 million.
• Private businesses added 242,000 jobs according to ADP Employment Change report for February.
• The job market remains strong, increasing expectations for a 50 bps rate hike at the Fed meeting in March.

JOLTs Job Openings Exceed Expectations

On March 8, U.S. released JOLTs Job Openings data for January. The report indicated that the number of job openings in the U.S. declined from 11.01 million in December to 10.82 million in January, compared to analyst consensus of 10.5 million.

Earlier, traders had a chance to take a look at the ADP Employment Change report for February. The report showed that private business added 242,000 jobs, compared to analyst consensus of 200,000. Both reports exceeded analyst expectations and showed that job market remained strong.

The FedWatch Tool indicates that there is a 82.3% probability of a 50 bps rate hike at the Fed meeting in March. The rate hike expectations have moved from 25 bps to 50 bps after yesterday’s comments from Fed Chair Powell. The job market data shows that Fed is forced to be more aggressive in order to fight inflation.

U.S. Dollar Gains Ground After Job Openings Report

U.S. Dollar Index moved back above the 105.60 level after the release of JOLTs Job Openings report. U.S. Dollar Index faced resistance near 105.90 as some traders decided to take profits off the table after the recent rally. The strong job market data may push the U.S. Dollar Index towards session highs.

Gold is trying to rebound after yesterday’s sell-off as Treasury yields pull back. The yield of 10-year Treasuries declined towards the 3.92% level as traders bet that Fed’s aggressive actions would beat inflation in the longer term.

S&P 500 tested new lows near 3970 as traders remained worried about additional rate hikes from the Fed.

For a look at all of today’s economic events, check out our economic calendar.