Weekly jobs data just keeps getting better

It may be boring, because it's gone on so long, but the news from the labor market just keeps getting better. The trends towards fewer layoffs and fewer people collecting unemployment insurance are still in place after more than 3 years. There were 18% fewer people collecting unemployment insurance last week than there were a year ago, and 11% fewer people were fired last week than were a year ago.

Fewer layoffs and fewer people on the dole don't equate to growth, of course, but they do say a lot about the health of the economy and the incentives that those still unemployed are facing. Businesses are laying off fewer people because business is getting better and it's harder and harder to find ways to cut costs. Fewer people collecting unemployment insurance mean more people are getting hired, and those who aren't have a greater incentive to find and accept a job going forward. With these trends still in place it's hard to see the economy entering another slump, and there's no evidence whatsoever in these numbers of any incipient economic weakness. That's important, because the market today is priced to the expectation that there will be weakness.

In short, markets are worried about what might happen tomorrow because of all the turmoil in Europe, not about what is happening. To date, the economic fundamentals of the U.S. economy continue to slowly improve, and as the above chart suggests, if this improvement continues, the market is going to have to shrug off its Eurozone concerns and get back into rally mode.