It's never good news when initial unemployment claims climb, but the new figures out this morning are better than expected and are still near a five-year low.
The number of people who applied for new unemployment benefits rose by 5,000 to 333,000 in the week ended Aug. 3, but the level of initial claims remained close to a five-year low in a possible sign of some improvement in the U.S. labor market. Economists surveyed by MarketWatch expected claims to climb to 339,000 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 6,250 to 335,500 to the lowest level since November 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 350,000 in 13 of the last 18 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.