Last week, U.S. initial jobless claims fell to their lowest level in more than three years, indicating that despite a recent wave of layoff announcements, employers are largely still holding on to their workers.

In the week ending November 29, the number of initial claims for unemployment benefits decreased by 27,000 to 191,000. It is worth noting that weekly jobless claims data can show particularly large swings around holiday periods. This figure was below the market expectation of 220,000.

In recent months, many employers have sharply scaled back hiring, and some large companies, including HP and FedEx, have announced layoffs. Even so, Thursday’s data suggest that actual layoffs remain limited, helping to ease concerns about a rapid deterioration in the labor market.

Although continuing claims for unemployment benefits fell back to 1.94 million in the week ending November 22, they remain close to the highest level since 2021. This job market characterized by low hiring and low firing has kept the number of initial claims for unemployment benefits suppressed, but it has also limited the ability of unemployed Americans to find new jobs.

According to data released on Wednesday by the ADP Research Institute, the number of jobs cut by U.S. companies in November was the highest in more than two years, mainly driven by small businesses. That report, together with the weekly jobless claims data, will provide a reference for Federal Reserve officials as they decide next week whether to cut interest rates for a third consecutive time.

Another set of data released on Thursday showed that, after surging sharply in the previous month, the number of layoffs announced by U.S. companies declined in November, but was still the highest for any November in the past three years.

Market Analysis:

On the daily chart, the U.S. Dollar Index has seen a modest rebound, with the MACD lines and histogram converging nearby. When Federal Reserve policymakers meet next week, they will still not have the November nonfarm payrolls report in hand. That report was originally scheduled for release on December 5, but due to a record-breaking government shutdown it has been postponed to December 16, with the October employment data to be released at the same time.