In a positive indication for the July employment report, initial jobless claims fell a very sharp 15,000 in the July 15 week which was also the sample week for monthly employment. The level of 233,000 is a sizable 13,000 below Econoday's consensus and compares with 242,000 in the June 17 week which was the sample week for the June employment report. A sample-week to sample-week comparison of the 4-week averages shows, however, a much less substantial 1,250 decline.
Continuing claims, where data lag by a week, rose 28,000 to 1.977 million with this 4-week average up slightly to 1.959 million. The unemployment rate for insured workers, which excludes job leavers and re-entrants, remains at a very low 1.4 percent.
There are no special factors in today's report and no states had to be estimated. The latest week's 15,000 decline in initial claims, despite the lack of movement in the 4-week average, will likely build expectations for solid payroll gains in July and for downward pull in the unemployment rate. Demand for labor, in contrast to wages and productivity, is very strong.
Demand for labor is very strong reflected in jobless claims which are at historic lows. Forecasters sees initial claims coming in at 246,000 in the July 15 week vs 247,000 in the prior week. Note that the July 15 week was also the sample week for the July employment report which will add focus to this report.