As we discussed last week, initial unemployment claims have been distorted of late by the government shutdown and processing delays in California, but the general trend has been encouraging over the last month or so. The new report from the Labor Department is another step in the right direction, though the latest figures still aren’t as encouraging as the reports from September.
The number of new applications for unemployment benefits fell by 9,000 to 336,000 in the week ended Nov. 2, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to fall to 335,000 on a seasonally adjusted basis. The average of new claims over the past month, a more reliable gauge than the volatile weekly number, declined by 9,250 to 348,250…. Initial claims from two weeks ago, meanwhile, were revised up to 345,000 from an original reading of 340,000, based on more complete data collected at the state level.
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, despite the recent spike, we’ve been below 340,000 in 12 of the last 17 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.