If you’re feeling the sting of statistical whiplash from watching the trendless trend for weekly jobless claims, you’re not alone. Whenever this crucial measure of the labor market show signs of progress, it doesn’t take long to reverse the good news with a fresh round of discouraging numbers. But just when you’re set to throw in the towel and accept a darker fate on this measure, it surprises on the upside. That frustrating state of affairs summarizes what’s been unfolding with initial jobless claims in 2010, and there’s no reason to think anything’s changed with this morning’s news that new filings for jobless benefits dipped last week.

There were 23,000 fewer new claims for unemployment insurance for the week through October 16 on a seasonally adjusted basis, the Labor Department reports. That’s the good news, although the shortened week due to the Columbus holiday on October 11 may have skewed the numbers. In any case, the bad news is that last week’s decline to 452,000 new filings looks familiar. We’ve been here before, only to watch the downtrend evaporate…many times. As the chart below reminds, this gauge of joblessness has been moved through the 450,000 mark, up and down, with a fair degree of frequency this year.

Is there any reason to think that last week’s decline has legs? Answering “yes” requires a sign that the economy is capable of creating jobs at a pace that’s mildly encouraging. Unfortunately, even by that modest standard there’s little reason for optimism, as the latest employment report suggests. Yes, there’s a bit of good news in the fact that the economy has been minting new private sector jobs on a net positive basis. That’s preferable to the alternative on the other side of zero, and arguably it’s enough to keep the double-dip recession risk at bay. But until and if we see a stronger upside in nonfarm payrolls, initial jobless claims are likely to continue their blazingly fast trip to nowhere. Simply put, the economy remains stuck in a precarious recovery that’s subject to any number of hazards.
Ellen Beeson Zenter, senior U.S. macroeconomist at Bank of Tokyo-Mitsubishi, speaks for many in a research note issued this morning (via Reuters) when she writes:

The larger-than-expected drop is welcome, but we’re left wondering whether the drop represents underlying improvement in the labor market or whether it is simply a function of the Columbus Day holiday in which many unemployment offices were closed. While jobless claims do seem to be on a downward trend, it can hardly be classified as pronounced and claims hovering around the 450,000 mark implies that little or no job growth exists.

That leaves the crowd looking to the next data point. Other than jobless claims reports (released every Thursday), the next big number that will shed light on where the labor market may be headed arrives on November 1, with the release of consumer spending and income numbers for September. The update for October nonfarm payrolls comes a few days later, on November 5.
It’s still all about jobs, but we’re not likely to learn anything new until early next month. And even then, the odds appear slim for a material change in the trend of late, for good or ill. In sum, the good news and the bad news is rolled up in one maddening fact when it comes to the big picture on employment: Nothing much is changing.