After the discouraging March jobs report last week, many hoped to see some more encouraging news this morning on initial unemployment claims. That’s not quite what happened.
The number of people who applied for U.S. unemployment benefits climbed by 14,000 to 281,000 in the seven days from March 29 to April 4, but the low level of initial claims shows that few workers are getting laid off even as job creation appears to have slowed. Economists polled by MarketWatch had expected initial claims to increase to a seasonally adjusted 285,000 from a revised 267,000 in the prior week. The average of new claims over the past month, meanwhile, dropped by 3,000 to 282,250 and touched the lowest level since June 2000, the Labor Department said Thursday.The four-week average smooths out sharp fluctuations in the more volatile 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. At this point, we’ve been below 300,000 in 24 of the last 30 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.