Desktop Issue

Macbook desktop showing a new folder being created randomly every 5 to 10 minutes.

Command-Shift-N is the pre-set shortcut for a New folder
Could you be hitting these keys occasionly?
.
If it persists sit in front of your mac, without touching the keys, see if it happens

It happens without touching the keyboard. I am wondering if it may be a bad keyboard. I have not had any spills.

It's easy enough to find out if the keyboard is malfunctioning, just swap it out with another. You can even use an inexpensive Windows keyboard as a temporary test as long as it's connected via USB.

This is a macbook with built in keyboard. Connecting an external keyboard should not override the internal keyboard will it? I should be able to use them both. I will try though.

Once you attach the USB keyboard, it will become the main keyboard. I ran my 2008 MacBook that way for years since I used it at home as a desktop replacement. Anyway, that should provide a way of testing to see if the internal keyboard is damaged.

OK, so I plugged an external keyboard up and it is still creating folders automatically on the desktop. Odd thing is, when I disconnect the internet it stops. Plug internet back in and folders start creating. It only creates one every 10 minutes or so.

Which browser are you using? If it's Safari, try using Firefox or Chrome instead. I suspect you have some kind of plug in or extension that might be making the folders.