We would not read much into the big drop in initial claims to 350K. Traditionally, auto plants retool in early July, resulting in temporary seasonal layoffs. And non seasonally adjusted claims did jump from 370K to 440K. But that’s not as much as the Department of Labor assumed, and so we got a big drop in seasonally adjusted claims. We will have to wait a few weeks to see real underlying trend.
That said, the fact that automakers are not retooling suggests robust underlying demand growth. So, indirectly, it’s good news.