After a couple of weeks in which initial unemployment claims hovered at seven-year lows, economists expected the new figures from the Labor Department to be more discouraging. They are, though there’s a seasonal catch.
The number of people who applied for U.S. unemployment benefits jumped by 24,000 to a three-week high of 329,000, the Labor Department said Thursday. Economists polled by MarketWatch had expected claims to rise to a seasonally adjusted 315,000 in the seven days ended April 19 from a revised 305,000 in the prior week. Claims often rise around Easter because the holiday falls on different dates each year and makes it harder for the government to conduct seasonal adjustments. The average of new claims over the past month rose by 4,750 to 316,750, just one week after falling to a six-and-a-half-year low.
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 340,000 in 14 of the last 16 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.