As the new year gets underway, initial unemployment claims have not yet returned to the great numbers we saw in October, but all things considered, the latest data isn’t bad at all.
The number of people who applied for U.S. unemployment benefits at the end of the year fell slightly and remained below the key 300,000 mark … offering more proof that the labor market is still on the upswing. Initial jobless claims dropped to 294,000 in the seven days ended Jan. 2 from an unrevised 298,000 in the prior week, the Labor Department said Thursday. Economists polled by MarketWatch had expected claims to total a seasonally adjusted 290,000.The average of new claims over the past month, meanwhile, inched down by 250 to 290,500. The four-week average 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 16 of the last 17 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.
Also, don’t forget, tomorrow we’ll see the BLS figures on job creation in December.