Fundamental Analysis for Novices: US JOLTS Job Openings
Thank you for joining the fundamental analysis for novices’ educational video. In this session will be looking at United States JOLTS job openings. Jolts defines job openings as all the positions that are opened on the last business day of the month. The criterium is that a specific position exists and that there is work available for that position.
If it’s the first time that you have seen one of our fundamental analysis videos for novices, we strongly recommend that you use an economic calendar every day if you are not already doing so. An economic calendar should act as your Bible in order to trade around it while avoiding high impact news data releases which may have a negative impact on your trades.
The key components of any economic calendar are the time of the release, the day and date, the type of event, and the impact that any such data release will likely have on the market, which is typically low, medium, and high. And where we can see an impact bar here displaying various levels of impact from low, which is in light orange, to medium shown in a darker orange and taking up a third of the box, to the full red impact box, which means that any data release is likely to cause extra volatility on its release.
Most economic calendars will also show you the previous period’s data release, which might be weekly monthly, quarterly, or annually, and also a general consensus of where market analysts believe the data statistics will be upon its release. And then we have the actual release data, which will be populated upon the release of the data. Most brokers will provide this information almost instantaneously to help your trading decision making.
Here we can see an example of the US JOLTS job openings for June 2020, which was released on Monday the 10th of August and came out at 3 p.m. BST and we can see the various data details including May’s release, the forecast or consensus, and the actual number of 5.89 million, which was higher than the consensus and higher than the previous for May.
Although the impact bar for this particular news release was set at low, because of the implications of the virus fallout, especially within the United States, which has suffered a huge economic collapse and massive unemployment, the market will be looking for any signs that jobs are rebounding, and this is a positive sign that job openings are appearing on the market.
This means that United States companies are confidence that they are recovering from the pandemic and that they are growing to a certain extent and need extra labour manpower to fill those vacancies which have been created within those organisations.
Typically, any increase in job openings is good for the United States economy, and therefore you might expect that United States stock indices to increase and where this is also good for the US dollar. However, when we see that job openings are lower, this would be bad for the United States economy and also bad for the US stock markets and the United States dollar.
Therefore, in these unprecedented times, we should not take for granted even US data releases, or from any economy, such low-impact status data, which at any normal time in history be met by a neutered response from the marketplace. Sometimes even low impact releases can cause extra volatility, and you should bear that in mind, especially until such time as the pandemic as gone away and things returned to some kind of normality.