A 3.9mln drop in Continuing Claims....>

US DATA REACT: A 3.9mln drop in Continuing Claims for the period ending May 16

(vs ~600k increase expected), plus a downward revision to the prior reading, is

the standout in the crowded 0830ET set of data releases. The 21.05mln in

continuing claims was way below the BBG survey low of 25.0mln (median 25.68mln).

- Looking into any possible anomalies w the data and there probably are a fair

few (there are a lot of zeroes in the columns for several states for Pandemic

Unemployment claims). But either way this number was a huge beat: the 21.05mln

in continuing claims was way below the BBG survey low of 25.0mln (median

25.68mln). Basic story is that either paycheck protection is doing what it's

designed to do by getting workers back on payrolls and/or people are heading

back to work as state-by-state lockdowns end.

- Most importantly it looks like we are past the peak on continuing claims. And

the insured unemployment rate fell to 14.5% for the week ending May 16, down

2.6% from the prior week - the return to work appears to have begun.