U.S. initial jobless claims drops in July end, nonfarm payrolls likely to have risen in July

U.S. jobless claims continue to hint at a sound labor market, with slight to no change in the pace of separations for most of this year. The initial jobless claims for the week ended 29 July dropped by 5000 to 240,000, from a revised 245k a week earlier. The reading was modestly better than the consensus expectations of 243k.

This leaves the four-week moving average in initial claims at 242k as compared with prior week’s 244k and 260k one year ago. Continuing claims for the week ended 22 July rose 3k to 1968k and the four-week moving average remained stable at 1965k. The insured jobless rate remained stable at 1.4 percent.

Meanwhile, the nonfarm payrolls are likely to have increased 175k, with a 170k rise in private payrolls, noted Barclays in a research report. July would be the first “clean” reading on labor markets since April, as the timing of the May survey week and the return of college-aged workers to the labor force distorted May and June payrolls, stated Barclays.

The average rise in payrolls this year has been 179k, and the projection assumes this trend rate of hiring continued in July. Meanwhile, the report is expected to show the jobless rate to have dropped by one-tenth to 4.3 percent, while the average hourly earnings are expected to have risen 0.3 percent sequentially and 2.4 percent year-on-year, added Barclays. Average week hours are likely to have remained at 34.5.

At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 4.15911. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest