To the delight of nearly everyone, initial unemployment claims have twice dropped below the 300,000 threshold in recent weeks, pushing the totals to lows unseen since the start of the Great Recession. But we’re occasionally reminded that progress rarely moves in a straight line.
The number of people who applied for unemployment benefits rose 21,000 to 311,000 in the week the ended Aug. 9, hitting the highest level since June, according to government data released Thursday. Despite that rise, weekly claims remained near pre-recession levels, signaling a slow pace of layoffs. Economists polled by MarketWatch had expected initial claims for regular state unemployment-insurance benefits to rise to 300,000 in the most recent weekly data from an originally reported 289,000 for the prior period. […]The four-week average of new claims, a trend that’s less volatile than weekly changes, rose 2,000 to 295,750, the U.S. Labor Department reported.
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 330,000 in 20 of the last 23 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.
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