THURSDAY JOBS REPORT OUT – AT 9:20 A.M. ET:  From Bloomberg:

Initial claims for unemployment insurance payments in the U.S. fell last week to a level that shows limited improvement in the labor market.

Applications for jobless benefits decreased 1,000 in the week ended July 30 to 400,000, the fewest in almost four months, the Labor Department said today in Washington. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The four-week average also declined to the lowest level since April.

A further reduction in the pace of dismissals may be needed before companies gain the confidence to step up hiring, which has slowed in the past three months. Employers added 85,000 workers in July, economists project a Labor Department report to show tomorrow, failing to reduce a jobless rate that’s holding above 9 percent.

“Claims are moving in the right direction, which is a sign things probably aren’t getting worse in the labor market,” said Drew Matus, a senior U.S. economist at UBS Securities LLC in Stamford, Connecticut, who correctly forecast the level of claims. “There’s still job creation going on but it’s just not at a rate that’s going to make people feel more comfortable about the economic outlook.”

COMMENT:  This report doesn't reflect the psychological impact of the debt deal reached this week.  And 400,000 unemployment claims is still startling high.  If cuts in defense spending are anticipated, that could mean more layoffs in the coming months.

The figures here really don't point anywhere.  Other economic reports this week were decidedly negative.

August 4, 2011