The initial claims level repeated its sawtooth motion this week as claims fell to 457,000 for the week ending July 24 from 468,000 for the week ending July 17. The Briefing.com consensus expected the claims level to remain at last week's pre-revised level of 464,000 claimants. The volatility in the initial claims level over the past couple of weeks has been associated with poor seasonal adjustment factors, which resulted in an unreliable explanation of the labor sector during the entire month of July. Prior to this week's release, the DOL announced that there may be a couple more weeks of volatile data before the seasonal adjustment problems are alleviated. The DOL did not issue any more guidance regarding the seasonal adjustment problems after today's release. As the volatility in the claims level slowed to a change of only 11,000 this week, down from 36,000 during the previous two weeks, the data lead us to believe that the seasonal adjustment problems are quickly being resolved and that a true picture of the labor market can be obtained from the claims report. Unfortunately, the labor picture is pointing toward more of the same problems that have been occurring since the middle of November. Since that time, the claims level has been bounded between 450,000 and 500,000 claimants per week. As soon as claims reach the bottom of the range, another layoff announcement is seemingly made and claims quickly jump back toward the top of the range. Until the initial claims level breaks through the lower bound and settles closer to 400,000, the unemployment rate will continue to tick higher and nonfarm payroll growth will remain below levels needed to foster stronger economic activity. The continuing claims level jumped back to 4.565 mln for the week ending July 17 from 4.484 mln for the week ending July 10. The consensus expected claims to rise to 4.550 mln. Due to the one week lag in data collection, the continuing claims level remains unreliable due to seasonal adjustment factors. If the adjustment problems there follow initial claims, we should experience a small leg down in the continuing claims level next week.