PRE JOLTS ANALYSIS
Previous: 7.15M
Event: JOLTS Job Openings
Consensus: 7.21M
Macro Context
The market is currently pricing in a slight re-acceleration in job openings. However, an analysis of the relevant leading indicators points more toward a continued cooling of the labor market rather than renewed momentum.
Leading Indicators – Summary
NFIB Small Business Survey
Hiring Plans: 17% (−2pp MoM)
Overall Hiring: 53% (−3pp MoM)
Jobs Hard to Fill: 33% (stable, but above historical norm)
→ Declining hiring appetite among SMEs, despite ongoing structural labor shortages.
ISM Manufacturing (Update: 02.02.2025)
- Headline: 52.6% (+4.7pp MoM)
- First expansion month in 12 months
- New Orders: 57.1% (+9.7pp MoM, strongly expansionary)
- Production: 55.9% (+5.2pp MoM)
- Employment: 48.1% (+3.3pp MoM, still contracting but significantly improving)
- Backlog of Orders: 51.6% (+5.8pp, from contracting to growing)
→ Surprisingly strong cyclical rebound in the manufacturing sector. However, employment remains contracting (48.1%) and is only improving gradually. The positive effect on job openings is likely to occur with a time lag (1-2 months lag) and may not yet be fully visible in tomorrow's JOLTS print. Manufacturing accounts for ~11% of total employment and thus remains a smaller factor compared to services
ISM Services
- Services PMI: 54.4 (+1.8pp MoM)
- Third consecutive month of expansion
→ Services are stabilizing the labor market but are not generating new breadth.
Consumer Confidence – Labor Market Differential
- Jobs Plentiful: **23.5%** (↓ from 27.5%)
- Jobs Hard to Get: **20.8%** (↑ from 19.1%)
- Expect Fewer Jobs: **28.5%** (↑)
- Expect More Jobs: **13.9%** (↓)
→ Clear sentiment shift among consumers, historically a reliable leading indicator for fading labor market momentum.
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Jobless Claims & Challenger Job Cuts
- Initial Jobless Claims (4W Avg): **~206k** (stable)
- Challenger Job Cuts: **1.2M (+58%)**, highest level since 2020
→ Layoffs have been announced but are not yet fully reflected in claims. A typical lag effect.
Overall Assessment
The U.S. labor market remains **functionally stable** but is losing **momentum and breadth**.
Hiring is being deferred, while layoffs remain limited so far. The data profile is consistent with **late-cycle cooling**, not a renewed acceleration.
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JOLTS Bias (Pre-Release)
Bias:
-**Slightly below consensus or at best inline**
- Expected range: **~6.9 – 7.1M**
- Upside above **7.2M** is considered **unlikely**
Rationale:
- Declining hiring plans (NFIB)
- Weakening consumer labor market sentiment
- Persistent weakness in manufacturing
- Services sector stabilizes but does not create new momentum
- Rising Challenger Job Cuts exert a delayed negative impact on job openings
A materially stronger JOLTS print would be primarily **lag-driven** and inconsistent with current leading indicators.