For the fourth time in as many weeks, today’s update on initial jobless claims shows that new unemployment filings are hugging the 370,000 neighborhood on a seasonally adjusted basis. The fact that claims aren’t rising is an encouraging sign, of course. But the resistance at the 370,000 level, if it rolls on, will raise more questions about the labor market’s capacity for growth.

For the moment, however, the case for optimism is still stronger. New claims last week remained near the lowest levels since the recession was formally declared null and void as of mid-2009. That’s a sign that suggests job growth continues to forge on. Indeed, one good report and new claims could touch a new post-recession low.

A crucial bit of supporting evidence for the bullish case is the ongoing year-over-year decline in new claims before seasonal adjustment. As the second chart below shows, new claims have been falling by 10% to 20% over last four weeks on an unadjusted basis, with last week’s tally posting a 13% drop vs. the same week a year ago. In other words, nothing seems to have changed–the decline continues.

The weekly seasonally adjusted figures of late appear to be stalled, but that could just be noise. History reminds us that it’s usually dangerous to read too much into a few data points on a weekly basis for this series. A more robust analysis comes from analyzing the annual trend, which effectively tells us to think positively until there’s stronger evidence otherwise in the weekly data.
“We haven’t seen very real improvement this year, but claims are not at catastrophic levels,” says David Semmens, a senior U.S. economist at Standard Chartered Bank in London. “They have come down. The labor market is still in a point of flux, but it’s doing OK.”