JP MORGAN: 'Distortion Likely' In Today's Jobless Claims Number

This was much lower than the 369k economists were expecting.

The stunning drop has at least one economist questioning the report.

From JP Morgan's Daniel Silver:

US: Initial claims drop but a distortion likely
Initial claims plunged 37,000 to 335,000 during the week ending January 12, reaching a new best for the expansion to date. However, the claims data can be very volatile around the turn of the year and the Department of Labor indicated that at least some of this most recent drop may have been due to an “adjustment issue,” so it is likely not a very reliable indicator for the labor market. It may take a few more weeks until we can get a clean read on the labor market from the claims numbers.

Continuing claims jumped 87,000 to 3.124mn during the week ending January 5 after tumbling 109,000 the prior week. This recent volatility is also likely due to seasonal adjustment issues around the holiday season.

Last October, a similar drop in jobless claims (fell to 339k from 369k) sparked the same reaction from economists.