The general trend on initial unemployment claims over the last month has been very encouraging. This week’s report, however, was bad enough to send a ripple of fear among those keeping a close eye on the economy.
The number of Americans who filed requests for jobless benefits rose by 24,000 last week to a seasonally adjusted 399,000, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 375,000 from 372,000. Economists surveyed by MarketWatch had projected claims would rise to 380,000 in the week ended Jan. 7. The average of new claims over the past four weeks, meanwhile, increased by 7,750 to 381,750.
The New York Times‘ David Leonhardt called the data “nasty,” adding, “It may not mean much — data is noisy — but [this morning’s report] does offer a dash of skepticism” about the economy.
In terms of metrics, keep in mind, when these jobless claims fall below the 400,000 threshold, it’s evidence of an improving jobs landscape. When the number drops below 370,000, it suggests jobs are actually being created rather quickly.
We dropped below the 370,000 threshold a few weeks ago, but as of this morning, we’re now just barely below 400,000 — generally the dividing line between the right direction and the wrong direction.
There have been plenty of reasons to feel generally optimistic about the economic trends lately, but as Han Solo once said, “We’re not out of the woods yet”.
And with that, here’s the new homemade 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.