For several years, those rooting for the U.S. job market to improve found it hard to imagine initial unemployment claims dropping below the 300,000 threshold. Now, it’s happening all the time. Take the latest data from the Labor Department, for example.
The number of people who applied for U.S. unemployment benefits last week remained below 300,000, suggesting little likelihood that a brightening outlook for the labor market will dim anytime soon. Initial claims edged down by 1,000 to 298,000 in the seven days ended Aug. 23 and remained near an eight-year low, the Labor Department reported Thursday. Economists surveyed by MarketWatch expected claims to total 300,000 on a seasonally adjusted basis.What’s more, the average of new claims over the past month fell by 1,250 to 299,750. The monthly figure smooths out the jumpiness in the weekly data and offers a better look at underlying trends in the labor market.
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 330,000 in 22 of the last 25 weeks. (We’ve also been below 300,000 in four of the last six 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.