US Jobs Alarm: JOLTS Plummet, Risk of Slowdown Rises
Job openings in the United States fell sharply in December and hit their lowest level since 2020—a sign that labor demand is weakening more rapidly than the market expected. This data comes from the US Bureau of Labor Statistics' (BLS) Job Openings and Labor Turnover Survey (JOLTS) report released on Thursday (February 5th), which market participants often use to gauge the labor market's temperature.
The number of available positions fell to 6.54 million, down from a downwardly revised 6.93 million in November. What's striking is that this latest figure fell short of all estimates in economist surveys—meaning the market was caught off guard by the deeper-than-expected decline.
For the market, a decline in job openings is usually interpreted as a signal that companies are becoming more cautious about hiring. This means that workers could be slowly losing bargaining power, and wage pressures could potentially ease—one way that could help inflation decline.
At the same time, the report also indicated a slight increase in layoffs. While it doesn't necessarily mean a major wave of layoffs, the combination of "shrinking vacancies + slight increase in layoffs" is often seen as a signal that the job market is starting to enter a cooling phase, no longer super tight.
The implication for financial markets: if the labor data series gets weaker, expectations of interest rate cuts could revive, as the Fed will have more reason to ease policy when the risk of an economic slowdown rises. Conversely, if other data remains strong, the market could remain volatile due to the competing narratives.
Source: Newsmaker.id
