With 2010 wrapping up, it's easy to get to the point where you want to hear any good news about the economy at all, so the mildly positive information in the national unemployment claims announcement today is welcome, but it's a little early to start singing "Happy Days Are Here Again":
For the first time in more than two years, the number of Americans filing for their first week of unemployment benefits fell below 400,000 last week — a ray of hope in the one of the longest job droughts in U.S. history.
The number of initial claims fell to 388,000 in the week ended Dec. 25, down 34,000 from the week before, the Labor Department said Thursday.
The report marks the first time claims have broken below 400,000 since July 2008 — two months before the financial crisis peaked with the Lehman Brothers bankruptcy.
"It's impressive to finally see unemployment claims fall below 400,000," said Stuart Hoffman, chief economist with PNC Financial Services, who said that if there were a magic number for unemployment claims, 400,000 would be it.
Though the figure is seasonally adjusted, Hoffman said the data can get distorted around the holiday period, and this week's number included the Christmas holiday.
"We need to see more evidence over the next few weeks, particularly in the early part of 2011, to know that this is a real downside breakout and fewer people are getting laid off," Hoffman said.
While it's just one component of a healthy job market, Hoffman said a downward trend in first-time unemployment claims would be a "major accomplishment."