The number of people who applied for jobless benefits last week was barely changed at 326,000, offering more evidence that the labor market has not softened as much as the government's critical employment report in December suggested. Initial jobless claims edged up by 1,000 in the week ended Jan. 18, the Labor Department said Thursday. Economists polled by MarketWatch had expected claims, a good proxy for layoffs, to total 330,000 on a seasonally adjusted basis. The claims report is often jumpy and unreliable as labor-market indicator during the holiday season, but it usually reverts to normal toward the end of January. The average of new claims over the past month, seen as a more reliable gauge, fell by 3,750 to 331,500. That's the lowest level in six weeks.
Initial unemployment claims were pretty volatile during the holidays, but the latest figures from the Labor Department suggest the swings have eased and the totals have largely leveled off.
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 14 of the last 15 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.