UPDATE: A source explained to us exactly what happened and which state accounted for the plunge. Read more here.
Earlier this morning, the Department of Labor reported that initial jobless claims plunged to 339K from 369K a week ago.
Economists were looking for a reading of 370k.
Immediately, Twitter exploded with tweets mocking Jack Welch, who claimed last week’s jobs report was fixed to artificially drop the September unemployment rate to 7.8 percent from 8.1 percent in August.
One state accounted for most of the plunge in claims, a Labor Department spokesman said as the data were issued to the press.
And from the WSJ:
“However, the report may not be as positive as the sharp drop indicates. A Labor Department economist said one large state didn’t report additional quarterly figures as expected, accounting for a substantial part of the decrease.”
Initially, rumors started circulating that an entire state’s worth of jobless claims was excluded.
The DoL was not immediately available to comment.
However, CNBC’s Kelly Evans is reporting that the discrepancy is that “one state did not process & report its typical seasonal workload” and that a rebound next week is likely.
We will update as we get more details.