Jobless Claims Down Again: Is the Labor Market Back on Track?

Since hitting a peak at the height of the Great Recession — when weekly jobless claims hit 667,000 on March 28, 2009 — the number of Americans filing for their first week of unemployment benefits have fallen sharply, even though the downward progression has been uneven at times.

But despite the occasional spike, the numbers are beginning to show more and more often that the labor market is strengthening. As a sign of the improving health of the market, the Labor Department reported Thursday that initial jobless claims fell for the third consecutive week, dropping to 332,000, from the previous week’s upwardly revised 342,000.

Analysts polled by Reuters had expected the numbers to show an increase from last week, with the average forecast set at 350,000.

The Labor Department’s report also showed more firm evidence of a recovery in the labor market; the four-week moving average for new claims, a less volatile measure of labor market trends, dropped by 2,750 claims to 346,750, the lowest level in five years. This suggests that underlying labor market conditions are strengthening, as did the Labor Department’s Employment Situation that was released last week. It showed that the pace of hiring has accelerated; in the month of February, job additions soared to 236,000, pushing down unemployment to 7.7 percent…