After last week’s extraordinary report on initial unemployment claims, this week’s data was bound to be at least a little disappointing. But the fact remains that figures like these remain quite encouraging in the larger context.
The number of people who applied for U.S. unemployment benefits rose by 17,000 last week to 283,000, but initial claims remained below the key 300,000 level for the sixth straight week to reflect the low level of layoffs taking place in the economy. Economists polled by MarketWatch had expected claims to rise to a seasonally adjusted 285,000 in the week ended Oct. 18.The average of new claims over the past month, meanwhile, fell by 3,000 to 281,000 to mark the lowest level in 14 years, the Labor Department said Thursday. The four-week average reduces seasonal volatility in the weekly data and is seen as providing a more accurate snapshot 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 10 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.
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Jobless claims climb, but remain low overall