Watching initial unemployment claims lately is not for the faint of heart. Two weeks ago showed extraordinary improvements, which was followed a week later by a sharp increase. The new figures from the Department of Labor have bounced back in an encouraging direction
Applications for U.S. unemployment benefits fell by 23,000 to a seasonally adjusted 369,000 in the week of Oct. 14-20, the Labor Department said Thursday, in line with market expectations. Initial claims from two weeks ago were revised up to 392,000 from an original reading of 388,000, based on more complete data collected at the state level. New claims have jumped up and down over the past three weeks because of seasonal quirks and other technical problems with the government's weekly data, mainly involving the state of California. The four-week moving average, which smoothes out volatility in the weekly reports, was little changed, rising 1,500 to 368,000.
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. We've been below the 370,000 threshold 11 of the last 16 weeks.
And with that, here's 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.
