As expected last week's 418K in initial claims was revised higher to 422K, but the big surprise was this week's drop in claims to 398K on expectations of 415k. The market appears to relish the fact that the streak of 16 weeks of 400K+ prints is broken, although that is quite amusing as next week's upward revision will mean the 400k+ streak will continue. Although one should let the market have its pyrrhic victory for the day. What was truly amazing is that Non Seasonally Adjusted claims plunged from 470K to 366K, a 104K move in one week! Once again the BLS lets everyone have a chuckle on their behalf. The main reason for the drop in claims was New York and Minnesota, which saw a decline in claims of 17,377 and 10,352 due to i) Fewer layoffs in the education related services, transportation, and other service industries and ii) Fewer furloughs in state government. There was also some good news in MI and OH, which saw 7K and 5K drops in layoffs due to "Fewer layoffs in the automobile industry." Offsetting the weekly improvement in these states was the surge in California claims by 20,813 due to a "Return to a five day work week" and a spike in Georgia claims by 6,567 due to "layoffs in the manufacturing, trade, service, and construction industries." Those on extended claims reversed their decline and increased by 62K in the week ended July 9. Lastly, continuing claims came worse than expected at 3,703K on expectations of 3,700K, an increase from the unrevised 3698K but a drop from the naturally upwardly revised 3720K.