There was a surprising bump last week in initial unemployment claims, interrupting an otherwise encouraging trend, but as expected, the new data from the Labor Department points in the right direction.
The number of people who applied for U.S. unemployment benefits fell by 17,000 last week to 297,000, returning initial claims to levels consistent with a steadily improving labor market after a surprising spike in the prior week. Economists polled by MarketWatch had expected initial claims to fall to a seasonally adjusted 298,000 in the seven days ended Nov. 29, a week that included Thanksgiving. […]The average of new claims over the past month, meanwhile, rose by 4,750 to 299,000, the Labor Department said Thursday. The four-week average, which remains near a post-recession low, smoothens out seasonal volatility in the weekly report and is seen as a more accurate predictor 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 13 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.