LIVE MARKETS-Before and after: JOLTS vs NFIB

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BEFORE AND AFTER: JOLTS VS NFIB

Data released on Tuesday provided investors with an educational glimpse of market confidence just prior to and shortly after policy chaos arrived at the White House.

The number of unfilled jobs in the U.S. increased by 3.1% in January to 7.74 million in January, according to the Labor Department, whose Job Openings and Labor Turnover Survey (JOLTS) USJOLT=ECI.

That's from a downwardly revised 7.508 million job openings the month prior and 110,000 more than analysts expected.

JOLTS, which tracks U.S. labor market churn, also showed new hires essentially holding steady, while total separations increased, with an uptick in the quit rate - to 2.1% of the workforce from 1.9% in December - driving the bulk of those gains.

While a closely watched jobs market metric, JOLTS is also ancient history as indicators go; its survey period occurred just over a week into Trump's presidency.

"These January data included only the earliest days of DOGE-inspired layoffs of Federal workers," writes Carl Weinberg, chief economist at High Frequency Economics. "That does not mean that layoffs in size in Federal workers will not be a big feature of the February report, scheduled for release on April 1."

"Watch out!" Weinberg adds.

Watch out indeed. Since the survey, the new administration's chaotic approach to trade/tariffs, billionaire Elon Musk's mass firings of government employees and its aggressive anti-immigrant policies have sent economic anxieties through the roof.

As a result, a group of economists polled by Reuters believe the possibility the of the U.S. tipping into recession has grown likelier.

So the February JOLTS report is likely to tell a different tale. Workers are less likely to quit their jobs voluntarily in times of economic uncertainty, for example.

Even so, the longer term downward trajectory of JOLTS job openings lines up quite nicely with the deteriorating jobs confidence, courtesy of The Conference Board:

Separately, the mood among owners of small U.S. businesses grown cloudier for the second month running.

The National Federation of Independent Business' (NFIB) Optimism index USOPIN=ECI slid 2.1 points to print at 100.7, its sourest reading since before the November election.

Elsewhere in the report the uncertainty index continued to spike, reaching the second-highest level ever recorded. The net percentage of survey participants who believe now is a good time to expand fell five full points, its largest drop since April 2020, the nadir of the pandemic shutdown panic.

A net 32% of respondents say they expect to raise prices, a ten-point monthly surge and the third-highest reading ever. This, despite the fact that fewer identified inflation as their "most important problem."

Near-term capex plans deteriorated further, and are well below its 2024 average, as Samuel Tombs, chief economist at Pantheon Macroeconomics points out.

"Even Republican-leaning small business owners are rattled by the tariff and spending cut plans of the new administration," Tombs writes. "The proportion of businesses responding 'don't know' or 'uncertain' to six key questions in the survey rose to its second-highest level since the survey began in the mid-1980s."

"As a result, businesses are postponing non-essential spending," Tombs adds. "An increasing proportion of firms also are pausing new hiring."

As Tombs suggests, the NFIB is a politically active membership organization whose political action committee (PAC) skews heavily Republican, according to the Center for Responsive Politics/opensecrets.org.

(Stephen Culp)

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