The number of Americans applying for unemployment rose slightly this week, but the four-week average — a more accurate indicator of the job market — is now at 335,000 a week. The four-week average has not been this low since November of 2007, before the worst of the financial crisis began.

Unemployment claims increased by 5,000 last week to a seasonally adjusted 333,000. That’s far below 400,000, the number that generally suggests the economy is shedding jobs.

Though the 162,000 jobs the Labor Department estimated were created in July were the lowest in several months, the economy has added jobs at its fastest pace since 1999, as the president continually points out in his speeches touting “A Better Bargain.” An average of 1.5 million jobs lost per month is lower than the 1.77 million per month lost in 2006, before the economy was in recession.

Layoffs are down 10 percent since the beginning of the year despite the tax increases that kicked in on January 1st and the sequestration that began on March 1st. The mandatory cuts in the sequestration are expected to lead to a loss of 1.6 million jobs by the end of 2014.

The economy’s slow but steady recovery will face its most serious challenge late this year. Republicans are not only threatening a government shutdown if the president does not meet their demands, which include defunding Obamacare, but also seem to be edging toward a repeat of the debt limit crisis of 2011, which led to a sharp decline in consumer confidence that shook the stock markets, likely resulting in slower job growth.

Even if Republicans decide not to play chicken with the economy, the fact that corporate profits have never been higher and wages as a share of gross domestic product have never been lower suggests there are major problems with government policy that need to be addressed.