Not sure what accounts for this (and the Labor Department offers no specific explanation either), but a 15-week streak of 400,000+ weekly jobless claims ended last week.
Claims dropped to 398,000, a decrease of 24,000 from the previous week’s revised figure of 422,000, according to figures released today by the Department of Labor.
Economists consider 400,000 to be a crucial number — the number below which jobless claims need to drop to make a difference in the unemployment rate or to achieve stability in the labor market. But, as Ed has explained in the past, that’s somewhat of a myth:
Take a look at the historical series of weekly claims between December 2005 and December 2007, the last time we really had “stability” in the labor force. The highest number in that period was 355,000 in a week, and that was in December 2007 when the economy slid into recession. In fact, between January 2004 and January 2008, we had only two weeks of 400K-level weekly claims, both in September 2005, and they were very much the exception. The average for that four-year span is 326,735, and the median number is 324,000 — which is why I usually use the 325K number in my analyses. We actually didn’t get to the 400K level until July 2008, at which point no one considered the labor market “stable.”
So, we still have a long way to go. Still, it seems like a hopeful sign to me that the four-week moving average also declined to 413,750, a decrease of 8,500. Even if it’s only for this week, I’ll rejoice in the lower figures and even call ’em “unexpected,” even if that does mean Ed might accuse me of sounding like Reuters.