Though January offered some wild seasonal swings on initial unemployment claims, the new report from the Department of Labor shows conditions improving quite a bit in February.
The number of Americans who applied last week for new jobless benefits fell sharply, though it’s unclear whether part of the drop stemmed from the huge snowstorm that battered the Northeast. Applications for initial unemployment benefits sank 27,000 to a seasonally adjusted 341,000 in the week ended Feb. 9, the Labor Department said Thursday. Economists surveyed by MarketWatch expected a much smaller drop to 360,000 from a revised 368,000 in the prior week. Claims are now just slightly above a five-year low.
It’s worth noting that results from Illinois and Connecticut were incomplete due to heavy snow storms, leading the Labor Department to use estimates.
That said, the seasonally adjusted 341,000 claims is the second-best total we’ve seen in the U.S. in the last five years.
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 eight of the last 10 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.