US Job Openings Fall to 7.08M as Dollar Hits 2-Month High, What Comes Next For The US Markets?

• US job openings fell to 7.079M as the US labor market cooled, while US Dollar strength and Dollar strength remained firm amid the Fed rate hike outlook
• US job openings declined by 256,000 in August, reaching their lowest level since March
• The dollar gained 1.8% in September as higher Treasury yields and expectations for tighter Fed policy supported the greenback

The latest US jobs data unveiled by JOLTS has revealed a cooler US labor market stance. Per the latest report, US job openings have declined by 256,000 in August to 7.079M, below expectations, signalling a cooler US labor market. This data has arrived at a time when the US dollar has been surging high in strength. The Bloomberg dollar spot index is up 1.8% this September, as higher treasury yields and expectations for more Fed tightening supported the greenback further. What do these two opposing signals mean for the US market?

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US Job Openings Fall As Labour Market Cools

The latest US job openings data reveals how available job positions have declined from July to August. The positions have fallen from 7.335M to 7.079M, falling short of expectations around 7.2M. Breaking down the sectors, the construction openings fell by 48,000 to 251,000. Manufacturing openings, on the other hand, have declined by 54,000 per the latest BLS data.

“US job openings dropped -256,000 in August to 7.08 million, their lowest level since March. Available vacancies have now declined by -506,000 since April. The decline was driven by real estate and rental and leasing job openings, which fell by 62,000 to 47,000, their lowest since September 2015. Since January 2025, job openings in this sector have plunged -144,000. Furthermore, job openings in manufacturing and construction declined 54,000 and 48,000 last month, respectively. As a result, there are just 48,000 more available vacancies than unemployed workers, down from 419,000 in July. The Fed cannot ignore the weak US labor market.”

The recent US job opening pullback has arrived at a time when the Fed rate hike outlook is being gauged for October. The markets have lately been pricing for a Fed rate hike.

But the recent US job opening data has signalled a cooler market which the Fed cannot ignore for long. The LSEG data is reflecting this sentiment strongly, with the probability of an October Fed rate hike now sitting at around 44%. However the US labor market has been holding itself steady, and has not adopted widespread layoffs and cuts.

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Dollar Strength Is Returning

The US dollar narrative is once again gaining the central spotlight at present. The US dollar has been gaining stronger momentum recently. The Bloomberg dollar index has risen by 1.8%, while other currencies projected a weak stance against the USD.

“The US dollar is having its strongest month since June. The Bloomberg Dollar Spot Index has risen +1.7% in September, reaching its highest level in 2 months. The rally has been supported by the Federal Reserve’s renewed focus on inflation, with markets now fully pricing a December rate hike and seeing +90 basis points of tightening over the next 12 months. Furthermore, hawkish comments from Fed officials, including Michael Barr and John Williams, have reinforced expectations for further rate increases, while the Iran war has kept energy prices elevated and pushed Treasury yields higher. The move has been broad-based, with all G10 currencies except the yen weakening against the dollar this month.”

Treasury yields have played an important part for the currency.

The 30-year treasury yields have hit their highest levels since 2002. Investors are continuing to assess inflation factors and the possibility of further monetary tightening.

What Comes Next For US Markets?

The next major test will come when the BLS unveils the September employment report and additional inflationary metrics. Those releases may help the Fed make a more defined decision while assessing whether the cooler US labor market strengthens the case for a rate cut or not.

For now, the picture remains mixed. The US job openings have declined while the dollar remains strong. This has left the Fed outlook highly dependent on the next batch of data, which may end up determining the course of the US dollar and US markets in October.

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