The number of people who filed new applications for unemployment benefits fell slightly in the last week of December, suggesting that the U.S. labor market continues to slowly improve. Initial claims declined by 2,000 to 339,000 in the week ended Dec. 28, the Labor Department said Thursday. Economists surveyed by MarketWatch expected claims -- a rough proxy for layoffs -- to total 342,000 on a seasonally adjusted basis. The average of new claims over the past month, usually a more reliable gauge than the volatile weekly number, rose by 8,500 to 357,250. That's the highest level since late October, but the increase likely reflects a temporary holiday-season spike that will fade over the next few weeks.
The Labor Department's first report of the new year on initial unemployment claims actually covers the final week of 2013, and it appears last year ended on a fairly positive note.
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, despite the recent spike, we've been below 370,000 in 11 of the last 12 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.