Here’s a quick look at the initial claims data.

Initial claims for unemployment insurance for the week ending August 1 dropped from 588,000 the week before to 550,000. The four-week moving average which is the one you want to watch was at 555,250 which represents a drop of 4,750. The four-week average peaked 17 weeks ago and is down 103,500 from the peak.

This is still a weak report and unemployment is still increasing. If there is a surge in Q3 GDP and we don’t see a commensurate improvement in these numbers then you can postulate a very difficult recovery. We should start getting some clarity on that by mid-September.

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