Initial Jobless Claims At 216K

New jobless claims are signaling substantial strength in the labor market, at a nearly as-expected 216,000 in the July 13 week which was also the sample week for the July employment report. Comparisons with the reporting week for the June employment report are favorable, showing small declines at the both headline level and for the 4-week average.

Continuing claims, in lagging data for the July 6 week, fell 42,000 with this 4-week average steady at 1.701 million. The unemployment rate for insured workers is also steady, at a very low 1.2 percent.

This report offers a significant signal that the labor market, after June's sharp 224,000 rise in nonfarm payrolls, is strong and growing at the same time it would appear that the Federal Reserve, at its month-end policy meeting, will be cutting interest rates.