The number of people who applied for U.S. unemployment benefits sank by 27,000 to 300,000 in the week ended May 24, the Labor Department said Thursday. That's the second lowest reading since the end of the recession in mid-2009. Economists polled by MarketWatch had expected claims to total 322,000 on a seasonally adjusted basis. The average of new claims over the past month declined by 11,250 to 311,500, marking the lowest level since August 2007.
There's been some volatility of late on initial unemployment claims, but the latest figures from the Labor Department nevertheless show the second-best data we've seen in seven years.
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 330,000 in 10 of the last 13 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.