U.S. applications for new unemployment benefits fell by 12,000 to 350,000 in the week ended Dec. 22, but the decline may have been exaggerated by the Christmas holiday. The federal government was closed Monday and Tuesday and many states also closed for both days. As a result, the Labor Department had to use estimates to gauge the level of jobless claims for 19 states, including California and Texas, because of paperwork delays. Rarely does the government need to use estimates for more than one or two states in any week. Initial claims from two weeks ago were revised up to 362,000 from an original reading of 361,000, based on more complete data collected at the state level. Economists surveyed by MarketWatch expected claims to total 361,000.
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 just five of the last nine weeks, though the further we get from the effects of Hurricane Sandy, the more these figures should improve.
Above you'll find 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.