Initial claims fell -10k to 222k
Initial claims fell -10k to 222k in the second week of May from an 8-month high of 232k (was 231k), versus a 16-month low of 194k in mid-January. The initial claims spike at the beginning of May was led by a 10k rise in New York that reflected half of the 20k NSA total claims rise, likely reflecting the start of spring break at New York schools. Analysts saw respective declines in the second week of May of -9k and -13k. Continuing claims rose 13k to a still-tight 1,794k from 1,781k (was 1,785k), versus a 2-year high of 1,829 in late-January. Initial claims are averaging 226k in May, versus lower prior monthly averages of 212k in April, 214k in March, and 209k in February. Analysts expect a 216k May BLS survey week reading that exceeds recent survey week readings of 212k in both March and April and 200k in February. For continuing claims analysts expect a 26k rise between the April and May BLS survey weeks, following a -36k April drop, but gains of 5k in March and 44k in February. The up-tilt for initial and continuing claims into May after a lean path since last summer implies neutral risk for our 190k May nonfarm payroll estimate.
