Ordinarily, initial unemployment claims are released on Thursday mornings, but with Thanksgiving coming tomorrow, we received some good news a day early.
The number of new applications for unemployment benefits fell by 10,000 to 316,000 in the week ended Nov. 23, the Labor Department said Thursday. That’s the lowest level since the last week of September, though claims are often volatile during the holiday season and harder to decipher as an indicator of labor-market trends. Economists surveyed by MarketWatch expected claims to rise to 330,000 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 7,500 to 331,750, the lowest level in nearly two months.
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 13 of the last 20 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.