First-time claims for state unemployment benefits fell unexpectedly in the latest week, the Labor Department reported Thursday. The number of initial claims in the week ending Aug. 4 fell 6,000 to 361,000. The consensus forecast of Wall Street economists was for claims to rise 5,000 to 370,000.
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 five times in the last 18 weeks, but here's the good news: we've been below 370,000 in four of the last five 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.