On the eve of the new jobs report, many hoped for positive news on initial unemployment claims. They got it.
The number of Americans applying for new jobless benefits lingered below 300,000 for the eighth straight week amid the lowest level of layoffs in years. Initial jobless claims fell by 10,000 to 278,000 in the week ended Nov. 1, the Labor Department said Thursday. That’s the second smallest number since the Great Recession ended and one of the lowest in 35 years. Economists polled by MarketWatch expected claims to total a seasonally adjusted 285,000.The average of new claims over the past month, meanwhile, dropped by 2,250 to 279,000, touching a 14-year low. The four-week average reduces seasonal volatility in the weekly report and is seen as a more accurate gauge of labor-market trends.
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 300,000 in 12 of the last 22 weeks (and each of the last eight 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.