Original market concerns regarding the European Central Bank (ECB) potentially raising interest rates subsided after ECB President Mario Draghi pulled a Janet Yellen and took a very dovish tone. In the end, the ECB left interest rates unchanged at the record low of 0.05%. Policymakers also said further stimulus measures were being prepared for use if needed. While the value of the euro crashed to a two-year low, the Dow Jones Industrial Average and the S&P 500 continued to rally, both managed to touch new all-time highs intraday. Oddly enough, volatility remains in check for now on a day when the market is usually dreading the first-Friday monthly employment report. Today though, there are some further encouraging signs that tomorrow’s release will be better than anticipated.

In addition to ADP’s solid employment numbers yesterday, it appears that the weekly jobless claims are also pointing to a potentially better reading in Friday’s jobs report. However, Challenger's monthly jobs cut report noted that layoff count in October was at 51,183; a sharp increase from the 14-year low in September of 30,477 and 45,730 in October of last year. Layoff announcements were heavy across a number of industries during the month, especially in retail, computer, pharmaceutical, and telecom related sectors. That said, it’s apparent that most of these workers were able to turn around and find new jobs right away since jobless claims, both initial and continuing, have been steadily falling over the last two months. Initial jobless claims declined in the November 1^st week, falling by 10,000 to 278,000. This knocked off approximately 2,250 claims off of the 4-week average to 279,000. This is the seventh decline in the past eight weeks for the 4-week average and the reading is now at a new 14-year low. Continuing jobless claims, which lag by a week, were also down to 2.348 million for a 39,000 decline and another 14-year low in the week ended October 25^th. The 4-week average for continuing claims dropped by 8,000 in the week to 2.370 million, with the unemployment rate for insured workers unchanged at 1.8%. These are quite encouraging figures since there are no special seasonality factors or holidays in the report, and this definitely bodes well for October’s unemployment rate which will be released tomorrow.

Also released this morning was the quarterly reading for nonfarm productivity and costs. Productivity measures the growth of labor efficiency in producing the economy's goods and services, while the unit labor costs reflect the labor costs of producing each unit of output. Both readings are significant, as they are indicators of future inflationary trends. In the third quarter of 2014, nonfarm productivity growth advanced an annualized rate of 2.0%, following a 2.9% boost in the second quarter. Unit-labor costs also increased, but just slightly, by 0.3% after falling by an annualized rate of 0.5% in the second quarter. During the quarter, output growth decelerated to 4.4% after jumping by 5.5% in the previous quarter. However, overall compensation growth held its normal pace of 2.3%. Compared to the same quarter a year ago, productivity was up 0.9%, which is actually down from the 1.3% year-over-year rate in the second quarter. On the other hand, unit labor costs were up 2.4% year-over-year which was significantly higher than the 1.5% year-over year-rate in Q2-2014.