After a rough couple of weeks, the Labor Department report on initial unemployment claims was supposed to finally show some improvement today. Fortunately, it did.
The number of people who applied for U.S. unemployment benefits last week fell by 26,000 to 319,000 to mark the lowest level in a month, but the decline likely stemmed from seasonal quirks instead of any major change in hiring trends or layoffs. Economists surveyed by MarketWatch had expected claims to fall to a seasonally adjusted 325,000 in the week ended May 3. Claims often see-saw in April because of the Easter holiday and spring break, when school employees such as bus drivers and cafeteria workers are eligible in some states for temporary benefits. The average of new claims over the past month, meanwhile, rose by 4,500 to 324,750, the Labor Department said Thursday.
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 340,000 in 15 of the last 18 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.