The US Labor Department reported Thursday that jobless claims slipped to their lowest level since the beginning of the biggest economic downturn in the US since the Great Depression. According to the report, initial requests for unemployment benefits dropped 26,000 to 350,000, a level they haven't been at since March of 2008. Despite the fact that claims fell close to pre-recession levels, some economists warned that the data may have been skewed somewhat because automakers delayed summer retooling shutdowns. Of course, the fact that they had to delay the closures is in itself a positive note as it provides evidence of strong demand.
While initial claims reached a four-year low, the four-week moving average of claims fell by 9,750 to 376,500, its lowest level since May. With initial claims often fluctuating wildly from week to week, the moving average is used to provide a clearer picture of the underlying trends. From December 2011 to February of this year, job growth was solid in the US, with an average of 250,000 jobs being created each month. But hiring slowed considerably in the spring and into the summer as employers grew nervous about the ongoing sovereign debt crisis in Europe.
Ironically, the lone bright spot in the US economy in recent weeks has been the housing sector, which is showing stronger signs of recovery than at any time since the recession began. Builder confidence has surged in recent months, prices have actually begun the climb back up in some markets, and housing data tracker CoreLogic reported las6t week that the number of underwater homeowners in the US ius finally starting to decline.