Initial Claims Down 16% Year To Year, Another Record Low For May

A weak US economy may be stretched to its natural limits, and could be overextended, based on initial unemployment claims data.

The advance number of actual initial claims under state programs, unadjusted, totaled 269,689 in the week ending May 10, a decrease of 19,059 (or -6.6 percent) from the previous week. The seasonal factors had expected an increase of 2,887 (or 1.0 percent) from the previous week. There were 320,253 initial claims in the comparable week in 2013. - Department of Labor (DOL)

Initial Claims – Click to enlarge

Initial unemployment claims were 16% lower than the same week a year ago. This is at the low end the range of the past 3.5 years which has typically fluctuated between -5% and -15% with a handful of outliers. The seasonally adjusted headline number was 297,000. According to one major survey, the consensus of Wall Street economists was for a gain of 325,000. The seasonally adjusted number is a fictitious number made up to smooth the trend to account for seasonal differences. While these numbers are a representation of the trend, they sometimes give false impressions. This week the strength of  headline impression and the actual trend were consistent.