Looks as if Hurricane Sandy had a larger impact than most people are willing to admit. That huge surge in jobless claims (from a four-week moving average of 365K to 409K) in November was certainly temporary as we've now come full circle. Today's jobless claims data hit a post-recession low of 335K. That brought the four-week average down to 359K.
Why is this good news?
First of all, jobless claims are one of the best real-time indicators of economic activity. We just don't see recessions that aren't accompanied by spikes in the claims data. It literally doesn't happen.
Second of all, the claims data tends to correlate fairly well with the S&P 500. So, what's good for the job market tends to be good for the stock market (more businesses hiring because they're seeing better demand, etc.).
Finally, claims tend to be a good sign for the labor market. Non-farm payrolls and the inverted claims data have a very high correlation. At present, the trend is telling us that the growth in jobs is steady.
Things aren't so bad after all.