It's discouraging when initial unemployment claims inch higher, but at least the new report from the Department of Labor was slightly better than expected.
The number of people who applied for U.S. unemployment benefits rose to a seasonally adjusted 367,000 in the week of Sept. 23- 29, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims to rise to 370,000. Initial claims from two weeks ago were revised up to 363,000 from an original reading of 359,000, based on more complete data collected at the state level. The average of new claims over the past month, meanwhile, was unchanged at 375,000. The four-week average reduces seasonal volatility in the weekly data and is seen as a more accurate barometer of labor-market trends.
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. We've only managed to dip below the 370,000 threshold nine times in the last 26 weeks, but we've dipped below 370,000 in eight of the last 13 weeks.
And with that, here's 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. (Note: the new monthly jobs report will be released tomorrow morning.)