As we discussed earlier this month, since the start of the Great Recession, the very idea of initial unemployment claims dropping below the 300,000 threshold seemed rather fanciful. But the latest data from the Labor Department shows that it’s now happened three times in the last five weeks.
The number of people applying for unemployment benefits fell below 300,000 for the third time in five weeks, signaling once again that layoffs remain at a post-recession low amid an uptick in hiring in most major U.S. industries. Initial jobless claims fell by 14,000 to 298,000 in the week of Aug. 10 to Aug. 16, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to drop to 300,000 on a seasonally adjusted basis.The average of new claims over the past month, meanwhile, climbed by 4,750 to 300,750. Although that’s a four-week high, the monthly average is still near the lowest level in eight years.
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 21 of the last 24 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.