The number of Americans who applied last week for unemployment benefits fell slightly and is now back to a level that prevailed shortly before the Thanksgiving holiday. Initial jobless claims dipped by 2,000 to 326,000 in the week ended Jan. 11, the Labor Department said Thursday. That's' the lowest level in six weeks. Economists polled by MarketWatch had expected claims, a good proxy for layoffs, to total 330,000 on a seasonally adjusted basis. Claims tend to gyrate up and down during the holiday season, making the report less useful than usual as a barometer of labor-market trends. The report usually smoothens out by the end of January. The average of new claims over the past month, seen as a more reliable gauge, fell by 13,500 to 335,000.
Initial unemployment claims can get a little volatile around the holidays, but the recent reports from the Labor Department have nevertheless been encouraging.
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, despite the recent spike, we've been below 370,000 in 13 of the last 14 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.