Today's report on initial unemployment claims was widely expected to be good, but the newly released figures from the Department of Labor were even better than expected.
The number of Americans who applied for new unemployment benefits dropped by 9,000 to 323,000 in the week ended Aug. 31, keeping initial claims near a five-and-a-half year low. Economists surveyed by MarketWatch had expected claims to fall to 330,000 on a seasonally adjusted basis. The average of new claims over the past month, a more reliable gauge than the volatile weekly number, fell by 3,000 to 328,500, the U.S. Labor Department said Thursday. That's the lowest level since October 2007.
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 seven of the last eight 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.