This week, jobless claims for the period ending July 16 rebounded, rising 10K to 418K. So, perhaps we were correct. Most economists were looking for an increase this week, so it seems our theory was maybe not so special; the consensus view was for 415K. The four-week moving average was hardly energetic, decreasing by 2,750 this week, to 421,250. It was very close to last week’s change, just in the opposite direction.

It’s very clear now that economic activity is stalled, mostly likely due to the deadlock in Congress regarding the debt ceiling and accompanying and impending catastrophe. Manufacturing activity has certainly stalled, as seen again in today’s Philly Fed Index reading of 3.2; it was at least in positive territory, unlike the New York state measure.

For the period ending July 9, the insured unemployment rate improved a tenth of a percent to 2.9%. That amounted to 50K Americans getting a job, losing their unemployment benefits or evaporating under the intense American sun. The total amount of folks receiving a benefit of some sort for their unemployment improved by 159,696K, but still numbers 7.3 million.

The future of labor will have a lot to do with the future of interest rates, and if for some ungodly reason, Standard & Poor’s follows through on its warning and downgrades American credit, well then the cost of capital rises across the board. It’s lucky that American corporations have hoarded cash for so long, but I still don’t see them hiring in that kind of environment.

As always, I provide a few state statistics here:

The highest insured unemployment rates in the week ending July 2 were in Puerto Rico (4.9), Pennsylvania (4.1), Alaska (3.9), New Jersey (3.8), Oregon (3.8), Connecticut (3.7), Nevada (3.5), Rhode Island (3.5), California (3.4), Arizona (3.3), and Illinois (3.3).

The largest increases in initial claims for the week ending July 9 were in New York (+20,599), Minnesota (+9,681), Michigan (+9,030), Florida (+7,544), and Ohio (+5,839) while the largest decreases were in California (-15,751), New Jersey (-7,486), Massachusetts (-3,008), Illinois (-1,399), and Connecticut (-1,316).

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