Weekly initial jobless claims held steady at 505,000 versus one week ago, but the slow downward trend remains intact, suggesting the economic recovery that probably began during July is still in place.
The 4-week moving average, which removes some of the volatility in the weekly number, fell 6,500 to 514,000, while continuing claims, which have dropped dramatically in recent months, fell another 39,000 to 5.6 million.
Before we get too excited about the drop in continuing claims that totals over1 million from its peak, it is important to note that much of the decline is probably the result of standard benefits expiring after six months rather than job creation, especially given that the economy is still shedding jobs at a heady pace (see Thoughts on unemployment).
Nonetheless, the drop in weekly claims is modestly encouraging and signals the economy is slowly recovering from a very deep hole, but the slow pace and still-high level is a clear sign that we are not experiencing a robust recovery.
For a detailed explanation of weekly claims, please see Economy 101: What are weekly jobless claims?
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