After last week’s extraordinary report on initial unemployment claims, the data had nowhere to go but up, which is exactly what the Labor Department reported this morning.
The number of people who applied for U.S. unemployment benefits rose by 23,000 last week to 302,000, one week after falling to a 14-year low. Still, the level of initial claims remains near a post-recession bottom and continue to signal further improvement in the labor market. Economists polled by MarketWatch expected claims to total a seasonally adjusted 308,000 in the week ended July 26. The average of new claims over the past month, meanwhile, fell by 3,500 to 297,250, the Labor Department said. It’s the first time the monthly average has fallen below the 300,000 mark since April 2006 and reflects an eight-year low.
Note, the initial assessment last week was that there were 284,000 initial unemployment claims, which was the best total in eight years, but the revised, more accurate figure is 279,000, which made last week’s report the best in 14 years. No, that’s not a typo.
That said, 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 18 of the last 21 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.