The general trend on initial unemployment claims over the last few months has been largely encouraging, though there have been setbacks. Last week, for example, was a step in the wrong direction.
U.S. jobless claims dropped by 12,000 to a seasonally adjusted 367,000 in the week ended Jan. 28, the Labor Department said Thursday. Economists surveyed by MarketWatch had estimated claims would drop to 370,000. Claims from two weeks ago were revised up by 2,000 to 379,000. The four-week average of claims, meanwhile, fell a smaller 2,000 to 375,750. The monthly average smoothes out seasonal quirks and provides a more accurate assessment of labor-market trends, economists say.
In terms of metrics, keep in mind, when these jobless claims fall below the 400,000 threshold, it’s considered evidence of an improving jobs landscape. When the number drops below 370,000, it suggests jobs are actually being created rather quickly.
And with that, here’s 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.
Don’t forget, tomorrow is the first Friday of the month, which means we’ll get the official unemployment data for January.