After dropping to YTD lows last week – despite payrolls data showing a weakening labor market – initial jobless claims were expected to rebound modestly in the latest data… but they didn’t.

Whatever magic they are using pushed the seasonally-adjusted initial claims data to its lowest since February and the non-seasonally-adjusted claims to their lowest since Oct 2022…

Once again, we think it is important to remember that two distortions that likely boosted initial claims over the last few months – potentially fraudulent filings in Ohio and expanded eligibility for unemployment insurance in Minnesota – and that has begun to unwind in recent weeks…