Businesses aren't hiring much, but they're not resorting to big layoffs, either ...

Core Viewpoint - The U.S. jobs market appears to have stabilized, supporting the Federal Reserve's decision to maintain current interest rates [1] Group 1: Job Market Stability - Federal Reserve Chairman Jerome Powell indicated that the jobs market has shown signs of stabilization after a disappointing performance last year [1] - The latest jobless claims report aligns with Powell's assertion regarding the stabilization of the job market [1]

Greg RobbGreg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000. ...

Core Insights - The number of layoffs is a significant indicator of economic health, and currently, businesses are not cutting many jobs, indicating that the U.S. economy is still expanding [1] Group 1 - Layoffs are a critical measure of economic conditions [1] - Current job cuts are minimal, suggesting stability in the job market [1] - The U.S. economy continues to show signs of expansion despite potential concerns [1]

Market Overview - The three major indices are on a four-session winning streak, with expectations for a potential Santa Claus rally starting in the last five trading days of the year [1][2] - There is a historical concern as the last two years did not see a Santa Claus rally, and this year could break that trend [2] Trading Conditions - The S&P 500 is expected to have a trading range of about 30 to 35 points, with current volatility at approximately 13.7% [3] - A more defensive rotation is observed in the market, with interest rate-sensitive stocks, consumer staples, real estate, and financials leading the way [5] Economic Data - Mortgage applications have decreased by 5% week-over-week, with the 30-year mortgage rate hovering around 6.3% [7][12] - Jobless claims came in at 214,000, better than the expected 224,000, indicating a mixed picture in the jobs market with an unemployment rate of 4.6% [8][10] - The four-week moving average for initial claims is around 216,000 jobs, reflecting some normalization after previous outlier reports [11] Inflation and GDP - Recent economic data has exceeded expectations, contributing to equity gains, with GDP numbers coming in 1% above forecasts [13] - CPI inflation is reported at 2.7% on the headline and 2.6% on core, suggesting that inflation may not be a significant concern for the Fed [21] Commodity Market - Gold and silver have reached all-time highs, indicating a shift towards commodity trading amid geopolitical risks and central bank policies [22][23] - The gold-silver ratio suggests that gold is currently outperforming silver, which may indicate positive market sentiment and economic growth [24][25] Future Outlook - There are expectations for potential fiscal policies around housing in 2026, especially in an election year, which could influence market dynamics [17] - The market is currently pricing in two Fed rate cuts, with the first not expected until June, but there is uncertainty about how the market will react if these cuts are backed out [20]

Core Insights - The U.S. economy has experienced significant changes since President Trump took office, yet the low level of layoffs remains consistent [1] Economic Changes - The transition from President Biden to President Trump has brought about various economic shifts, but the stability in employment, particularly the low rate of layoffs, has been a notable constant [1]

Group 1 - Initial jobless claims for the week ending December 20th were reported at 214,000, significantly lower than the expected 225,000, marking the lowest level since late November [2] - Continuing claims rose to 1,923,000, surpassing the 1.9 million threshold for the first time since the third week of November, indicating a potential shift in the labor market [2][3] - There are concerns regarding the accuracy of seasonal adjustments in jobless claims data, as the process can be cumbersome and may distort the figures [4] Group 2 - The Wall Street Journal highlighted that generous welfare programs might be affecting jobless claims, potentially keeping the numbers artificially low [5] - The dollar index is on track for its worst year since 2017, with current trading levels indicating a potential three-month low close [6]

Macroeconomic Overview - Jobless claims in the week of November 22nd totaled 216,000, which is better than the expected 225,000, indicating a positive trend in the labor market [2] - The four-week moving average of jobless claims has decreased, suggesting a smoothing of data and a potential stabilization in employment trends [2] Labor Market Insights - The current economic environment is characterized by low hiring and low firing, contributing to a mixed picture of the labor market [3] - Despite some concerns regarding job losses indicated by alternative data sources like ADP, the jobless claims data reflects a continued lack of significant layoffs, suggesting resilience in the labor market [3] - Overall, the labor market presents both positive signs and challenges, indicating a complex economic landscape [3]

Labor Market Insights - Jobless claims reported at 216,000, a decrease from the revised 222,000 the previous week, indicating a stable labor market with low unemployment rates [2] - Continuing claims slightly increased to 1,960,000 from the revised 1,953,000, suggesting that while new claims are low, there is a slight uptick in ongoing unemployment [2] Economic Indicators - Durable goods orders rose by 0.5%, aligning with expectations, while capital goods shipments and non-defense orders showed a significant increase of 0.9%, three times the anticipated growth [3][4] - The strong business spending reflected in the September report indicates resilience in the overall economy, with specific categories of spending yet to be detailed [4] Federal Reserve Dynamics - The market appears unconcerned about the Federal Reserve's independence despite ongoing discussions about presidential influence, as the current Fed leadership remains unchanged [5] - Future nominations for the Fed chair will be critical in determining whether the new appointee will prioritize presidential directives or economic stability, which may reignite debates on Fed independence [6]

Labor Market Analysis - Preliminary estimates indicate a decrease in initial jobless claims by 13,000 to 219,000, the lowest in a month [2] - Continuing claims increased by 11,000 to 1.96 million, the highest since August [3] - Alternative data suggests no surge in job losses despite the government shutdown [4] - Regional Fed surveys indicate a pickup in job growth [4] Inflation Trends - Regional Fed surveys show prices ticking down slightly, but remaining elevated [4] - An index tracking CPI shows an acceleration in prices coinciding with tariffs, but the increases have flattened out [5] Data Reliability and Future Outlook - Alternative data is considered good but not comprehensive and hasn't been fully tested [6] - The government shutdown may delay the release of key economic reports, particularly the October report for November [8] - Exploration of alternative data sources, like the Troy Leka index, is considered valuable even after the government reopens [9][10][11] - The Troy Leka index effectively tracks jobs and inflation and could potentially improve [11] - The federal government layoffs could impact jobs data [13]