Highlights
The Labor Department, against the backdrop of summer auto retooling, strongly recommends watching the 4-week average for initial claims, and the average is offering a favorable indication for the July employment report. The 4-week average is down 8,750 in the July 21 week to 367,250 which is down a sizable 20,000 or so from the trend in June. For the July 21 week alone, claims fell 35,000 to nearly fully reverse the prior week's revised 36,000 jump. For the 3 prior weeks, claims fell a total of 40,000.

Continuing claims also show improvement, down 30,000 in data for the July 14 week to 3.287 million. The 4-week average is down 27,000 to 3.333 million which however is a bit above the trend in June. The unemployment rate for insured workers remains at 2.6 percent which is where it's been since mid-March.

The ups and downs of summer claims aside, this report is a positive for the employment outlook though there's still likely to be plenty of skeptics.

Market Consensus before announcement
Initial jobless claims surged 34,000 in the July 14 week to 386,000. But the 4-week average, reflecting the prior week's large downswing, is actually lower, down 1,500 to a 375,500 level that compares favorably to the month-ago level of 387,500. Recently large swings in the numbers appear to be due to seasonal adjustment issues related to the timing of summer retooling in the auto industry.