Job openings jump to 7.6 million, lifting dollar from lows

U.S. job openings surged to the highest in nearly two years, pulling the dollar off session lows and pushing back against recession fears.

U.S. job openings jumped to 7.62 million in April, the highest since May 2024 and well above the 6.88 million consensus forecast, sending the dollar rebounding from session lows as traders trimmed bets on near-term Fed easing. The job openings rate climbed to 4.6% from 4.2% in March, the Bureau of Labor Statistics said Tuesday in its Job Openings and Labor Turnover Survey.

Economists surveyed by Reuters had forecast 6.88 million openings, making the 731,000-beat one of the largest in the survey's recent history. The report follows two consecutive months of payroll gains exceeding 100,000, suggesting the labor market may be firming after wobbling earlier in 2025 under the weight of tariff uncertainty and the broader economic drag from the Iran conflict. First-time applications for unemployment benefits remain at historically low levels, the BLS data showed.

Hiring fell 419,000 to 5.12 million, pushing the hires rate to 3.2% from 3.5%, while layoffs dropped 192,000 to 1.69 million — the layoffs rate declining to 1.1% from 1.2%. The divergence between rising openings and falling hiring suggests employers are posting more positions but taking longer to fill them, a dynamic consistent with a tight labor market rather than a deteriorating one. The quits rate also edged lower, suggesting workers are becoming more cautious about leaving their current roles.

The data arrives as the Federal Reserve navigates conflicting signals: inflation accelerated at its fastest pace in three years in April, with the personal consumption expenditures price index rising sharply, while the economy contends with tariffs and the ongoing military campaign against Iran. The stronger-than-expected JOLTS reading reduces the urgency for the Fed to cut from the current 3.50%-3.75% range, a stance OIS markets have already priced into next year. Friday's May payrolls report is expected to show nonfarm payrolls rising by 85,000 and the unemployment rate holding at 4.3%, according to the Reuters survey of economists.

The last time job openings exceeded 7.6 million was in May 2024, when the economy was adding an average of 218,000 jobs per month and the Fed was still holding rates at 5.25%-5.50% before beginning its easing cycle in September. Since then, the Fed has cut by 175 basis points to the current range, and the labor market has remained a key pillar of economic resilience even as manufacturing and consumer sentiment softened. The current openings level suggests employers are still competing for workers despite the higher cost of capital and ongoing geopolitical uncertainty.

The dollar index reversed earlier losses after the release, gaining against the euro, the British pound and the Canadian dollar as the interest rate differential favored the U.S. currency. EUR/USD slipped as the single currency gave up earlier gains, while USD/JPY pushed higher as the yield gap between U.S. and Japanese government bonds widened. The 2-year Treasury yield rose as traders reduced bets on near-term rate cuts, while equity markets remained mixed as stronger labor data tempered both recession fears and hopes for imminent monetary easing.

For currency markets, a labor market that refuses to soften gives the Fed cover to hold rates higher for longer, widening the dollar's yield advantage over major peers. The euro and sterling, both sensitive to their respective central banks' rate paths, face additional headwinds if the U.S. labor market continues to outperform. The Canadian dollar, already under pressure from trade uncertainty, may struggle further as the interest rate differential with the U.S. persists. The resilience of the labor market will be a key input for the Fed's next rate decision, with the June meeting now in focus.

This article is for informational purposes only and does not constitute investment advice.