The initial unemployment claims were expected to show improvement, but the new figures from the Labor Department were even more encouraging than expected.
The number of people who applied for U.S. unemployment benefits fell by 10,000 to 311,000 last week to mark the lowest level in four months, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to total 320,000 on a seasonally adjusted basis in the week ended March 22. The average of new claims over the past month declined by 9,500 to 317,750. That was the lowest level since last September, when claims fell sharply because of a major errors related to a computer upgrade in California’s system for processing claims. The four-week average is the lowest since 2007 if the reports distorted by California’s computer problems are excluded.
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 10 of the last 12 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.