Much of the initial cheer in equity markets on Thursday was due to European Central Bank (ECB) efforts into further and expanded quantitative easing measures. With a strong economic situation in the United States, and at least some hope of inflation/deflation downward pressure easing, the markets are still aware that the U.S. Federal Reserve wants to normalize interest rates by raising them.

So, how does the U.S. Department of Labor’s reading on weekly jobless claims play into this?

Last week’s jobless claims fell to 259,000. Bloomberg had the consensus estimate pegged higher at 272,000, and its Econoday range of estimates was 270,000 to 278,000. In short, this reading was far fewer people showing up for unemployment benefits at the Labor Department. Another standout issue is that we haven’t seen claims this low since last October.

The prior week’s reading was revised slightly lower, down to 277,000 from 278,000 initially reported. The Bureau of Labor Statistics also indicated that no special factors influenced this weekly jobless claims report.

A big drop was also recorded in the continuing claims, now that prior spikes higher have fallen out of the numbers. The continuing claims reading comes with a one-week lag, but this fell 32,000 to 2.225 million.

Another positive in the jobs report was that the unemployment rate for insured workers was down by one-tenth of a percent to 1.6%.

Japan recently adopted negative interest rates, and its long-term bonds and notes reached record lows. The ECB is going deeper into negative interest rates, depending on how you see the payment flows and incentives to lend. Meanwhile, the U.S. Fed presidents still seem more interested in talking rates higher to a normalization after years of zero-rates.

Stay tuned. We have another Federal Open Market Committee (FOMC) meeting on March 15 and 16.

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