Initial unemployment claims have been stuck at a discouraging level lately, but according to the new figures from the Labor Department, last week offered a welcome break. The weather, however, may have contributed to the progress.
The number of people who applied for U.S. unemployment benefits fell by 26,000 to 323,000 in the week ended March 1, marking the lowest level since late November, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to total 335,000 on a seasonally adjusted basis. Like other economic reports, claims have been distorted by a harsh winter…. A better way to gauge the trend in claims is the four-week average that reduces the effects of weather and other unusual factors. The monthly average posted a much smaller decline of 2,000 to end up at 336,500, and it’s shown little change in 2014.
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 370,000 in 20 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.