This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jobless Claims Drop 27,000 to 300,000

WASHINGTON (MNI) - The latest U.S. unemployment claims and Q1 GDP reports show that the economy is still growing.

Unemployment claims were 300,000 in the week ending May 24, a 27,000 decline. This might reflect the start of the Memorial Day holiday, even though the Labor Department said there were no special factors.

However, in a broad sense claims remain on an improving trend. The May monthly average is 312,000 so far, down from 320,000 in April and 321,000 in March. Even if claims bounce a little in the coming week the trend looks good.

Unadjusted claims were -15,533 for the week, suggesting the move was exaggerated by poor adjustment for the current year's calendar.

Continuing unemployment claims were down 17,000 in the May 17 employment survey week to 2.631 million, and this series remains below the 2.9 million area seen in winter. This also indicates labor market improvement, though part of the move probably is due to benefits expiring. Continuing claims were 2.7 million in mid-April.

In the GDP revision, Q1 real growth was revised lower, to -1.0% from the original estimate of +0.1%. This unexpected and unusually large revision was about twice the usual 'miss' and resulted primarily from nonfarm inventories. The drop in GDP was the first decline since -1.3% in Q1:2011, though there also was significant slowing in late 2012.

Other than the magnitude of the GDP drop, the composition was pretty much as analysts expected as the Commerce Department filled in missing data.

New monthly data on manufacturing, retail, and mining inventories were lower, in part because of revised seasonal factors that were incorporated into the GDP accounts on a "best change" basis. Inventories now show a subtraction of 1.62 points from growth.

Lower inventories came at the same time that consumption was revised higher, primarily in the auto sector. This combination suggests growth ahead as factories produce more to meet demand; the Q1 inventory cut also might have reflected production delays during the harsh winter.

Net exports and residential investment also cut growth. State and local government spending was -1.8%, due to less investment.

Corporate profits data showed profits from current production -$213.4 billion and had no effect from expiring bonus depreciation schedules. Profits before tax posted a mere +$1.4 billion.

The Q1 profit decline was widespread. Domestic financial and nonfinancial and overseas profits all dropped. The recent rally in bonds probably will reverse this trend ahead for financial firms.

GDP prices posted +1.3%, illustrating still modest price changes.


Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $111.99 0.35%
FB $95.12 0.91%
GOOG $652.00 0.82%
TSLA $220.75 2.40%
YHOO $32.75 -0.33%


Chart of I:DJI
DOW 17,139.78 +7.92 0.05%
S&P 500 2,014.89 +15.91 0.80%
NASDAQ 4,832.7530 -5.89 -0.12%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs