The number of people who applied for regular state unemployment-insurance benefits dropped 22,000 to 344,000 in the week ended Feb. 23, the U.S. Department of Labor said Thursday. Even as large federal spending cuts are set to kick in soon through sequestration, the data signal continuing improvement in the labor market, though claims levels could jump going forward as workers are cut. Economists surveyed by MarketWatch had expected an initial-claims level of 362,000 for the most recent weekly data.
To reemphasize, congressional Republicans are prepared to reverse this progress very quickly by refusing to compromise on the sequester, but today’s report is a reminder that the job market, before our elected lawmakers hurt us on purpose, is showing clear signs of real improvement.
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. We’ve been below the 370,000 threshold 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.