This morning the Department of Labor announced its weekly initial jobless claims were at their lowest level since 2008. Specifically, they fell by 20,000 claims to a level of 368,000. This figure compares to expectations from economists of a rise in jobless claims to 395,000.
Long-term readers of the blog know that I prefer to look at the four-week moving average for jobless claims because it smooths this very volatile data series. The four-week moving average fell to 388,500 from 401,250, a week earlier. This is a decline of 12,750 and the lowest level since the summer of 2008.
Analysis: Folks this is very good news. Any level of jobless claims below 400,000 usually means that the U.S. economy is adding jobs, rather than losing them. That the four-week moving average is finally below 400,000 is extremely significant. That it is at its lowest level since the Great Recession was planting roots in our economy is even more fantastic.
In my opinion, the first and, especially, the second quarters of gross domestic product growth are going to be such that the unemployment rate finally starts falling. This won’t happen rapidly, but it will happen consistently.
Importance grade: 10; the initial jobless claims number today is among the most important milestones of the economic recovery logged so far.
Jason
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