More closely watched than the actual number of first time claimants is the 4-week moving average of claims because they tend to bounce around from week to week and, without the averaging, it is too difficult to detect an actual trend; either upward or downward. This week, the moving average was at 293,000.
The problem with the average being below 300,000 is that, historically and very oddly, this has resulted in a soon-to-be bottoming out of claims which precedes a sharp rise. What is worse, is that a recession soon followed Proof of this is shown in the following chart accessed from the Federal Reserve's Economic Database (aka FRED):
|Click on chart to zoom in|
So, there is definitely a very repeatable pattern of claims peaking; then, bottoming out; followed by a sharper rise and, ultimately a recession.
How low we will go and how fast we achieve it in this current trek below 300,000 is anyone's guess. But, one this is sure, if history repeats itself, lower claims are not such a good thing.
FRED: 4-Week Moving Average of Initial Claims: http://research.stlouisfed.org/fred2/graph/?id=IC4WSA,
U.S. jobless claims up less than expected, point to firming labor market: http://www.reuters.com/article/2014/09/25/us-economy-jobless-idUSKCN0HK1E420140925