There was clear and encouraging progress earlier in the year on initial unemployment claims, as the job market steadily improved. There’s some evidence that progress has come to a sudden end.
The number of people who applied for new unemployment benefits jumped 28,000 to a four-month high of 385,000 in the week ended March 30, the Labor Department said Thursday, but much of the increase likely reflects seasonal quirks related to the Easter holiday and spring break. Economists surveyed by MarketWatch had predicted claims would fall to 350,000 from an unrevised 357,000 in the prior week.
The seasonal caveats certainly matter, and the week-to-week increase may appear exaggerated. What’s more, we don’t yet know whether (and how much) congressional Republicans’ sequestration cuts are responsible for pushing these numbers higher. Still, today’s new total is the worst report since November.
Of course, 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 14 of the last 17 weeks, but we’ve seen the total rise in each of the last three 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.