Initial claims stay flattish

Initial claims for unemployment compensation dropped a bit this week, but continues on a rather flat trajectory.

Initial claims have been drifting down very slowly since the beginning of the year and have been essentially flat the last three months. I've said before that historically large gains in employment have come several months before initial claims fall below 400,000. On the other hand, it seems unlikely that we'll see big gains in employment if initial claims aren't falling. So modest growth in payroll employment (+50-100,000 private) seems a good bet to me for the month of July. I don't know what's going on with Census employment this month so the overall numbers are hard to predict.