Weekly Jobless Claims Sets Up Positive Bias for Payrolls and Unemployment Due Friday

What matters today is not just the drop and not just that it was better than expected. The 326,000 appears to be a post-recession low, and it is coinciding with a time when historically hirings are slow and plant idling takes place.

Another positive reading came as the four-week average fell by some 4,500 to 341,250. We also saw an improvement in the continuing jobless claims, which we call the army of the unemployed. This is reported with a one-week lag, but that number fell by 52,000 to 2,951,000.

Again, the big report will be the employment situation from the Labor Department on Friday. Bloomberg expects that the unemployment rate will have fallen to 7.5% in July from 7.6% in June. Nonfarm payrolls are expected to have risen by 175,000, and private sector payrolls are expected to have risen by 187,000.

S&P 500 futures are up 13 points and DJIA futures are up 112 points.