First time claims are down. Is that really good news? Midknight Review has an answer.

First-time claims for jobless aid fell by 17,000 to a seasonally-adjusted 421,000 in the week ending Dec. 4, the Labor Department said Thursday.

Every Thursday, this number is released. Over the past 5 weeks, these numbers have been below 450,000 per week.

Some see this as hopeful news that jobless claims, per this weekly report, means that the jobless recession is about to come to an end. Indeed, this might be the correct view.

But before we get to hysterical about all this good news, let's put this particular week's report into its historical context: namely, the most recent monthly report for unemployment benefits roles. That number was released last Friday and showed a sharp rise in unemployed benefits from 9.6% to 9.8% for the month of November.

A week ago, last Thursday, the weekly first time benefits report initially came in at 435,000 but was raised to 438,000. The next day, the startling news report of 9.8% unemployment was released. Now, six days later, we have the current weekly report.

How is it that the unemployment number increased while this week's total first time unemployed applicants went down? It is possible that one trend has not caught up with the other, in terms of reporting. If that is the case, we might expect to see a decrease from 9.8% with the early January monthly report. In fact, Midknight Review expects a decrease in the monthly [December] unemployment number with the January report.

If the December report [released in January] remains at 9.8% or increases, decreasing weekly jobless reports can only mean that fewer people have lost their jobs, not that more people are being put to work.