Yes, the needle is in correctly. I just got done changing out the belt on the machine from one of the plastic orange ones to an replica original from april1930s.com. Oddly enough, I put Aurifil back on the machine and it hasn't skipped once. I only changed it because I hated the look of the orange, and the sound it makes. That's rather bizarre isn't it? I've had that orange belt since I purchased the machine. FWIW, it never skipped stitches before the ruffler foot jam and resulting broken needle.
The other think I occasionally run into on this particular featherweight, is if I sew fast on it, the bobbin thread will hop out of the tension spring. Never happens when I sew slowly.
This machine is a bit temperamental. But she has the prettiest stitch when she's behaving!