The 8k initial claims drop to a new 48-year low of 207k
The 8k initial claims drop to a new 48-year low of 207k in the BLS survey week extended the 17k drop to 215k (was 214k) at the start of the month, as claims experienced a two-week hit from auto retooling distortions and last week's July 4th holiday. Claims slightly undershot the prior 48-year low of 209k in late-April, as the underlying downtrend in claims keeps new multi-decade lows in reach each week. Claims are averaging just 211k in July, versus higher recent averages of 225k in June, 223k in May, and 221k in April. Today's 207k BLS survey week reading undershot recent survey week readings of 218k in June, 223k in May, and 233k in April. Our 210k July nonfarm payroll estimate is in line with the 211k average gain in Q2, and is between the 198k average gain over the last 12 months and the 215k average gain since the start of 2018. Payrolls face ongoing upside risk from a tight path for claims and robust consumer, producer, and small business confidence, as well as an assumed firming in vehicle sales since the 3% June bounce, and an expected climb in the vehicle assembly rate to the 11.5 M area in July from 11.3 M in June and a depressed 10.3 M clip in May.