Weekly jobless claims report mainly more of the same

Last week, I covered a sudden and “unexpected” jump in weekly jobless claims, cautioning that a single week’s data didn’t necessarily mean much.  The jump from the 380K level that we had seen for most of 2011 to the 400Ks was mainly a psychological barrier, and that we would need to see what happened the next week — whether the trend corrected itself with a lower-than-expected number or whether claims kept rising.  This week, though, we got something in the middle:

In the week ending April 16, the advance figure for seasonally adjusted initial claims was 403,000, a decrease of 13,000 from the previous week’s revised figure of 416,000. The 4-week moving average was 399,000, an increase of 2,250 from the previous week’s revised average of 396,750.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending April 9, unchanged from the prior week’s unrevised rate of 2.9 percent.

The advance number for seasonally adjusted insured unemployment during the week ending April 9 was 3,695,000, a decrease of 7,000 from the preceding week’s revised level of 3,702,000. The 4-week moving average was 3,716,750, a decrease of 17,500 from the preceding week’s revised average of 3,734,250.

Last week, the initial estimate was 412K, which the DoL has increased to 416K.  This week the claims trended downward, but are still above where claims have been most of this year.  This doesn’t give much indication of whether we are entering a period of higher unemployment again or are merely experiencing statistical noise, as we did at times last year when claims stayed fairly close to the 460K range but would occasionally spike upward or downward by significant amounts.

Reuters captures the uncertainty in its news report:

The number of Americans filing new claims for unemployment benefits fell last week but held above the key 400,000 level, hinting at some loss of momentum in the labor market recovery.

Initial claims for state unemployment benefits fell 13,000 to a seasonally adjusted 403,000, the Labor Department said on Thursday, unwinding some of the prior week’s quarter-end jump.

Economists polled by Reuters had forecast claims slipping to 392,000. The prior week’s figure was revised up to 416,000 from the previously reported 412,000.

I’m not certain what is “key” about the 400K level except psychology.  The real “key” level is between 300-325K, where most economists believe we have to get before we see significant net job creation that will lower the number of unemployed.  The fact that we’ve jumped to a number with a 4 in front makes it clear we’re not getting there, but we weren’t getting there at 380K either.

If this trend continues in April, with two more such reports still left before the monthly unemployment rate gets announced on May 6th, don’t expect to see another month of 200k+ job growth.  However, if the numbers stay where they’re at now, don’t expect too big of a decline, either.