Jobless Claims -- This Would Be Huge If It Were Accurate. LOL.

Reuters is reporting:

Claims for jobless benefits unexpectedly dropped to the lowest level in more than five years, extending swings typical for the month of July.

Applications (INJCJC) for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, from a revised 345,000 the prior week, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 345,000. A government analyst said no states were estimated, and the data were still being influenced by the auto plant shutdowns that play havoc with the figures at this time of year. 

So, the analysts expected a the number to be 345,000 (compared to 345,000 revised from 343,000 last week) which meant almost no change. In fact, the analysts were off by almost 20,000 -- their biggest miss to date -- and a number from the Labor Department suggesting the lowest level in more than five years.

These incredibly "good" numbers come just as the president begins his 10-speech odyssey on how he will improve the economy for the rich and the poor. Very, very coincidental. I don't know how analysts could have been so far wrong.

Let's see: how did this affect the market? The Dow surges, up 135 points and oil is up almost $2.00.

So, we have Goldilocks: the market knows that tapering by the Fed, when it happens, will be very, very slow; and, the US economy appears to be taking off based on these new unemployment numbers. What is not to like, he asked rhetorically.

Back to the jobs report. Buried in the story, I think the real explanation is provided: automakers did not shut-down or slow-down as is usually the case in July. Of course, that's just one minor data point. I still think a miss by almost 20,000 is suspect, and so do others:

“Claims for the entire month of July are pretty much a waste because of seasonal issues,” Jacob Oubina, senior economist at RBC Capital Markets LLC in New York, said before the report. “Volatility spikes seriously in this number in early to mid-July. We’ll get cleaner information on claims in the weeks ahead.”

The less-volatile four-week moving average declined to 341,250 last week, a two-month low, from 345,750.