When initial unemployment claims reached 10-month highs in late February, the hope was this was a temporary blip caused by unexpected winter storms in much of the country. As of today, that theory is looking pretty good.
The number of people who applied for U.S. unemployment benefits sank by 36,000 to 289,000 in the seven days from March 1 to March 7, reversing a sharp uptick in late February that was likely triggered by a bout of bad weather. […]Economists polled by MarketWatch had expected new claims to fall to a seasonally adjusted 310,000 from a revised 325,000 in the prior week. The average of new claims over the past month, meanwhile, fell by 3,750 to 302,250, 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 20 of the last 26 weeks. On the other hand, we’ve been above 300,000 five of the last nine 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.