Initial jobless claims fell 26,000 during the week ended July 7 to 350,000. The sharp decline would be bullish if in fact it was not distorted by the July 4 holiday and fewer summer auto plant shutdowns. Typically in the summer, auto plant shutdowns and return of auto workers causes wide swings in jobless claims numbers.

The latest weekly numbers reflect a smaller number of layoffs compared with prior years. Continuing claims, which lag initial jobless claims by one week, declined 14,000 to 3.304 million. The labor market is the foremost concern of the Fed at the moment. But, we need to wait for clean numbers to assess the latest developments of the labor market.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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