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Initial jobless claims have been on a roller-coaster ride of ups and downs, but a Labor Department report released today is positive news for the labor market. After jumping up a revised 10.7% the previous week, initial jobless claims dropped 6.3% to 340,000 for the week ending May 18.
Analysts were pleasantly surprised by the numbers, having expected only a slight unrevised 4.2% decrease to 345,000. Initial claims hit an unrevised record low for the recovery three weeks ago, and this newest data points to the possibility that claims are trending lower.
With high volatility recently, the four-week moving average squeaked out a 0.1% drop to 339,500. With decreases across the board, both the most recent week's number and the moving average clock in solidly below 400,000, a cutoff point that economists consider a sign of an improving labor market.
On a state-by-state basis, not a single state recorded a decrease of more than 1,000 initial claims for the week ended May 11 (most recent available data, when claims jumped 10.7%). For the same week, five states registered increases of more than 1,000. California took the cake with a 15,060 initial claims jump due primarily to service sector layoffs. North Carolina added 1,826, while Mississippi, Florida, and Georgia all clocked in the low 1,000s, partially because of construction layoffs.