After several weeks of relative stability in initial unemployment claims, the latest figures from the Labor Department were unexpectedly discouraging.
The number of people who applied for U.S. unemployment benefits rose by 19,000 to 348,000 in the seven days ended Jan. 25, marking the highest level in six weeks. Economists surveyed by MarketWatch had expected claims to climb to 330,000 on a seasonally adjusted basis. Yet the average of new claims over the past month, a more reliable gauge than the volatile weekly number, barely rose, up 750 to 333,000, the Labor Department said Thursday.
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 15 of the last 16 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.