The general trajectory on initial unemployment claims has been encouraging of late, but reports like today’s are discouraging.
The number of people who applied for U.S. unemployment benefits jumped by 25,000 to 304,000 in the first week of February, topping the 300,000 mark for the fourth time in the past six weeks. Economists polled by MarketWatch had expected claims to rise to a seasonally adjusted 296,000.Initial claims are still on the low side after a rapid pickup in hiring, but they appear to have leveled off after an extended decline. The average of new claims over the past month, meanwhile, fell by 3,250 to 289,750, the Labor Department said Thursday.
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. At this point, we’ve been below 300,000 in 18 of the last 22 weeks. On the other hand, we’ve been above 300,000 three of the last five 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.