The number of people who applied for U.S. unemployment-insurance benefits plunged 43,000 to 265,000 in the week that ended Jan. 24, hitting the lowest tally in 14 years, according to Labor Department data released Thursday. The decline, the biggest since November 2012, was much larger than expected. Economists polled by MarketWatch had expected claims for regular state unemployment-insurance benefits to tick down to 296,000 in the most recent weekly data from 307,000 in the prior week. [...] The department said there were no special factors in the report but noted that the reference week was shortened by the federal Martin Luther King holiday.
To reiterate the point I make every Thursday morning, it’s worth remembering that week-to-week results can vary widely, and it’s best not to read too much significance into any one report.
In terms of metrics, when jobless claims fall below the 400,000 threshold, it’s considered evidence of an improving jobs landscape. At this point, we’ve been below 300,000 in 17 of the last 20 weeks.
Above you’ll find the chart showing weekly, initial unemployment claims going back to the beginning of 2007. (Remember, unlike the monthly jobs chart, a lower number is good news.) For context, I’ve added an arrow to show the point at which President Obama’s Recovery Act began spending money.