This week’s release of the JOLTS jobs report offers a more nuanced look at U.S. labor demand than headline unemployment figures alone, revealing slippage in job openings and sluggish hiring that may signal a broader cooling of the labor market. With the Federal Reserve already having cut rates in December amid internal debate, markets are parsing these detailed employment dynamics for clues on whether 2026 will bring a pause or further policy easing. As job openings fell below expectations and hiring remained subdued, investors and policymakers alike are weighing the implications for inflationary pressures and monetary strategy.

Why the JOLTS report is a better indicator for the Fed than unemployment itself

At first glance, JOLTS (Job Openings and Labor Turnover Survey) is just another labor market statistic. But it actually tells the Fed things that you won't see in the traditional unemployment rate in time. Unemployment is often a lagging indicator: firms first stop hiring, slow down…