Here's Why Everyone's Trashing Today's Awesome Jobless Claims Report

We just learned initial jobless claims plunged to 284,000, their lowest level since 2006.

Unfortunately, the data really don't tell us that much about the true health of the jobs market.

That's because July is traditionally a time when automakers shut down their plants for retooling.

According to Renaissance Macro's Neil Dutta, with auto sales surging, the figure instead says more about productivity. He writes:

Today's jobless claims data likely informs us more about production than employment. The unexpected decline to 284,000, the lowest since 2006, reflects the fact that US auto production is in overdrive at a time when factories are normally shutdown to retool for new makes and models. We would expect a significant pick-up in motor vehicle production and manufacturing employment in July.

That said, the underlying trend remains healthy, Dutta says.

"The four-week moving average, which removes some of the 'noise' continues to descend, falling to 302,000, a fresh cycle low. So, the underlying trend in firings remains low."

Yields on the U.S. 10-year note were up three points after the report.