First Time Jobless Claims Drop 10K

Initial jobless claims fell sizably in the May 21 week, down 10,000 to a lower-than-expected 268,000. But the 4-week average, reflecting three prior weeks of increases, is still rising, up 2,750 to a 278,500 level that is more than 20,000 above the month-ago comparison. This comparison points to trouble for the May employment report.

Indications from continuing claims are flat. In lagging data for the May 14 week, continuing claims rose 10,000 to 2.163 million with the 4-week average up 8,000 to 2.151 million. Continuing claims, unlike May, were trending only lower through most of April. The unemployment rate for insured workers is unchanged at a very low 1.6 percent.

The Labor Department is not citing any special factors in the latest report nor in recent reports, this despite the strike of 40,000 Verizon workers which remains an uncertain wildcard for employment readings.

Recent History Of This Indicator:
Initial jobless claims fell back sharply in the May 14 week to 278,000 and an incremental decline is expected for the May 21 week, at a consensus 275,000. Data in this report are at historic lows but have been trending higher and pointing at slowing gains for the May employment report.