The news on initial unemployment claims has been very encouraging in recent months, but there are going to be occasional hiccups. Take today’s new report, for example.
The number of people who applied for unemployment benefits last week posted the biggest increase in two months, but initial claims are still exceedingly low amid an uptick in hiring and relatively few layoffs. Initial jobless claims rose by 12,000 to a seasonally adjusted 290,000 in the seven days ended Nov. 8, the Labor Department said Thursday. […]The average of new claims over the past month, meanwhile, climbed by 6,000 to 285,000. The four-week average reduces seasonal volatility in the weekly data and is seen as a more accurate barometer of labor-market trends.
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, and when the number drops below 370,000, it suggests jobs are being created rather quickly. At this point, we’ve been 300,000 in each of the last nine weeks – the first time we’ve seen that in the United States in 14 years.
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.