For several months, the general trend on initial unemployment claims has been encouraging, reaching a four-year low just a few weeks ago. But today's new report is the second discouraging news we've received on this front in as many weeks.
The new figures are a slight improvement over last week's total, but that's only because last week's number was revised in the wrong direction.
The number of Americans who filed requests for jobless benefits totaled 386,000 last week, keeping claims at a four-month high, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 388,000 from an initial reading of 380,000. Economists surveyed by MarketWatch had projected claims would drop to a seasonally adjusted 374,000 in the week ended April 14, so the number is likely to disappoint investors. The average of new claims over the past four weeks, meanwhile, rose by 5,500 to 374,750, the highest level since late January.
Obviously, a couple disappointing reports may be little more than a blip, but when jobless claims are expected to drop, and instead remain stuck at a four-month high, it's concerning.
Making matters slightly worse is the realization that if conditions continue along these lines, there's very little that can be done -- Congress simply lacks the ability to pass effective economic legislation in the wake of the 2010 midterms.
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 actually being created rather quickly. After a month of four consecutive reports below 370,000, we've now been above 380,000 for two weeks.
And with that, here's the chart -- which reflects the revised, seasonably-adjusted data -- 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.