Initial Jobless Claims fall to 8 week low but…

Initial Claims totaled 454k, an 8 week low and 6k below expectations, offsetting a revision upwards by 3k to last week’s level of 475k. Typical July auto plant shutdowns, which influence the summer claims data, will not happen to the same extent as a month ago GM said they were not shutting plants down this summer. The Labor Dept though did say they didn’t see any influence yet in the states that GM does business in but historic seasonal adjustments may be skewed over the next few weeks. Continuing Claims fell a sharp 224k to the lowest since Nov ’08 and Extended Benefits fell a net 343k. The decline in these longer term claims data would be great if it was due to people finding new jobs but the lack of extension to employment benefits is resulting in people falling off the rolls involuntarily. Net-net, while clouded by the seasonals related to auto shutdowns or not, the 8 week low in the initial claims # is why the futures are rallying.

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