Applications for U.S. unemployment benefits rose slightly in late October, but the level of jobless claims continued to point to an improving labor market in which companies are holding onto the workers they already have while slowly beefing up their staffs. Initial jobless claims climbed by 3,000 to 287,000 in the week ended Oct. 25, the Labor Department said Thursday. Economists surveyed by MarketWatch had expected claims to fall to a seasonally adjusted 281,000. Claims have been under the key 300,000 benchmark for seven straight weeks for the first time since the recession ended. The average of new claims over the past month, meanwhile, dipped by 250 to 281,000. The four-week average reduces seasonal volatility in the weekly report 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. At this point, we’ve been 300,000 in 11 of the last 21 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.