Economy shows vigor in Q2, but seen flagging

Continued claims -- people remaining on the benefits rolls after drawing an initial week of aid -- hit the highest level since November 2003, although the figure may have been lifted by a program extending the duration of unemployment benefits.

The economy's sluggishness has hit the job market hard. Employers have shed a total of almost half a million jobs this year, and unemployment hit a four-year high of 5.7 percent last month.

(Additional reporting by Alister Bull in Washington and Burton Frierson and Richard Leong in New York; Editing by Leslie Adler)