We've seen a general swing in the right direction on initial unemployment claims over the last several weeks, but I don't think anyone expected the new report from the Department of Labor to be this good.
First-time claims for state unemployment benefits fell sharply in the latest week to their lowest level since February 2008, the Labor Department reported Thursday. The number of initial claims in the week ending Oct. 6 fell 30,000 to 339,000. The decline was unexpected. The consensus forecast of Wall Street economists was for claims to rise 1,000 to 368,000
To put this in perspective, today's report is so good, jobless claims have now reached their best point of the Obama presidency, and haven't been this good since February 2008 -- nearly five years ago.
That said, 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. (This is especially true this week, since the number will need to be revised next week.)
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 now been below the 370,000 threshold nine of the last 14 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. (Note: the new monthly jobs report will be released tomorrow morning.)