There are some relevant caveats to the new Department of Labor report on initial unemployment claims, but at this point, the figures look remarkably good.
Applications for U.S. unemployment benefits fell by 5,000 to a seasonally adjusted 330,000 in the week ended Jan. 19, marking the lowest level since January 2008. Yet the claims report can somewhat erratic in January after the end of the holiday season and it will take another few weeks of data to see if the number of people filing new claims remains at its current lows. The Labor Department said estimates were used for three states that did not file complete information on time, including California and Virginia. Economists surveyed by MarketWatch expected claims to climb to 360,000 last week.
The caveats certainly matter -- seasonal quirks don't last -- but for the record, the last time we saw a number this low, it was almost exactly five years ago.
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 six of the last seven weeks.
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.