The number of people who applied for U.S. unemployment benefits fell by 24,000 last week to 297,000, marking the lowest level since May 2007, the government said Thursday. Economists polled by MarketWatch had expected initial claims to total 321,000. The second straight big drop in new claims is probably related, at least in part, to a late Easter holiday. Easter fell on April 20 this year compared to March 31 in 2013, a big gap that makes it harder for the government to seasonally adjust its numbers before and after the holiday. Still, claims have been hovering near post-recession lows for most of 2014 and the latest report is another sign that the pace of layoffs remains extremely low. The average of new claims over the past month fell by a smaller 2,000 to 323,250. The monthly figure smooths out the jumpiness in the weekly data and offers a better look at the underlying trend.
How long has it been since initial unemployment claims were this low? Consider this tidbit: we haven't seen numbers this good since before the start of the Great Recession.
In an interesting coincidence, the last time claims were below 300,000, it was also the second week in May.
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 16 of the last 19 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.