After last week's unexpected jump in initial unemployment claims, many were eager to see this morning whether the totals would bounce back. According to the new figures from the Labor Department, they did.
The number of people who applied for unemployment benefits fell by 20,000 to 331,000 in the week ended Feb. 1, a sign the U.S. labor market continues to gradually improve. Economists surveyed by MarketWatch expected claims to drop to 337,000 on a seasonally adjusted basis. The average of new claims over the past month, a more reliable gauge than the volatile weekly number, edged down by 250 to 334,000, 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 16 of the last 17 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.