The initial unemployment claims have been pretty discouraging in August and September, making the new report from the Department of Labor a breath of fresh air.
Applications for U.S. unemployment benefits dropped 26,000 to a seasonally adjusted 359,000 in the week ended Sept. 22, the Labor Department said Thursday. That's the lowest level since late July. Economists surveyed by MarketWatch expected claims to fall to 375,000. Initial claims from two weeks ago were revised up 385,000 from an original reading of 382,000, based on more complete data collected at the state level. The average of new claims over the past month, meanwhile, declined by 4,000 to 374,000.
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 only managed to dip below the 370,000 threshold eight times in the last 25 weeks, but we've dipped below 370,000 in seven of the last 12 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.
