Let’s also ask the obvious question, even if a convincing answer for good or ill will have to wait: Is this a sign that the recent slowdown in economic growth is again giving way to stronger expansionary forces? Perhaps, but it’s premature to declare the rough patch history. We’ll need to see more encouraging news from the initial claims numbers. More importantly, the payrolls numbers have to start cooperating by dispatching stronger figures on net job growth. Rome can’t be rebuilt in a day, but maybe today’s number is the first brick in a new foundation for the fall.

The trend is certainly looking stronger. As the second chart below shows, the unadjusted annual change in jobless claims is 11% lower vs. this time last year. The further below zero, the better since it implies a fresh round of healing in the labor market. And to the extent this trend stays well below zero, it builds a stronger case for arguing that a new recession is a low risk event.

But let’s not loose sight of the obvious caveat: one number, encouraging and timely as it is, doesn’t change much. Indeed, if today’s number had brought us in the opposite direction, we might be preparing for the cycle’s funeral instead of pondering better days. Yes, we’re still that close to the precipice, but for a brief moment, at least, the threat has faded abit.

In any case, it takes weeks if not months of encouraging data to make a convincing case that the latest slowdown is truly behind us. At this early stage, there are still plenty of reasons to be cautious. “Layoffs clearly remain elevated, but the worst part of the adjustment to the first-half slowdown is abating,” says Richard DeKaser, an economist at Parthenon Group. “I still don’t expect relief on the unemployment rate in the next few months.”

The acid test for the economy is remains the creation of jobs, and by that standard there’s a long way to go to reverse the disappointments of late. At the same time, there have been clues that economic growth was holding up surprisingly well in broad terms, as I noted here. An expansive reading of May’s economic numbers reflected continued growth and June’s reports, most of which are in, suggest the expansion continues. That’s not always obvious by cherry picking macro stats, but there’s been a case all along for expecting the economy to muddle through. The summer of 2011, I recently wrote, didn’t look like a repeat of 2010, which is to say that the outlook has remained somewhat brighter.

That’s no excuse to minimize the challenges, which are many, including the risk of self-inflicted pain unleashed by the ongoing budget negotiations in Washington.

Politics aside, there’s a new incentive for optimism in town via today’s jobless claims report. Let’s see if it’s the start of a trend or just another head fake.

This post originally appeared at The Capital Spectator and is reproduced here with permission.