With the caveat that initial unemployment claims tend to get a little erratic shortly after the holidays, today’s new data from the Labor Department isn’t great.
The number of people who applied for U.S. unemployment benefits in the first full week of January shot up to the highest level in four months and topped the 300,000 mark for the first time since Thanksgiving. Initial jobless claims climbed 19,000 to 316,000 in the seven days ended Jan 9, the Labor Department said Thursday. That’s only the second time claims have risen above 300,000 since September. Economists polled by MarketWatch had expected claims to total a seasonally adjusted 295,000. […]The average of new claims over the past month, meanwhile, rose by 6,750 to 298,000, the Labor Department said Thursday. The four-week average smoothens out seasonal volatility in the weekly report and is seen as a more accurate predictor 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 below 300,000 in 16 of the last 18 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.