The data on initial unemployment claims was a little erratic around Labor Day, leading to some questions about what to expect next. With this in mind, the new data from the Labor Department was not only welcome news, it was better than anyone expected.
The number of people who applied for jobless benefits dropped 36,000 to 280,000 in the week that ended Sept. 13, hitting the lowest level since mid-July, signaling that employers are laying off very few workers, according to government data released Thursday. Economists polled by MarketWatch had expected initial claims for regular state unemployment-insurance benefits to decline to 305,000 in the most recent weekly data from an originally reported 315,000 for the prior period.On Thursday, the U.S. Labor Department tweaked initial claims for the week that ended Sept. 6 to 316,000. The four-week average of new claims, a trend that’s less volatile than weekly changes, fell 4,750 to 299,500, the government reported.
Just to add some additional contest, this new report is the best since mid-July, but more important, the 280,000 figure suggests initial unemployment claims are approaching a 14-year low.
That said, 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 24 of the last 27 weeks. (We’ve also been below 300,000 in 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.
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Jobless claims show sharp improvement, near 14-year low