Home Business Jobless claims show sharp drop last week, labor market remains challenged

Jobless claims show sharp drop last week, labor market remains challenged

Jobless claims fell sharply last week despite brutal winter storms that swept across Texas and other parts of the South, the Labor Department reported Thursday.

First-time filings for unemployment insurance totaled 730,000 for the week ended Feb. 20, well below the Dow Jones estimate of 845,000.

That total represented a substantial decrease from the 841,000 the previous week, a number that was revised lower by 20,000.

Despite the decline, the total, the lowest since Nov. 28, still was well above anything the U.S. labor market had seen prior to the Covid-19 pandemic.

Continuing claims also fell, decreasing 101,000 to 4.42 million, the lowest since March 21, 2020, but also still well above anything the labor market had seen prior to the pandemic.

Other economic reports Thursday morning showed that spending on long-lasting goods jumped 3.4% on the headline and 1.4% excluding transportation, both well above Wall Street estimates.

Also, the second reading of gross domestic product in the fourth quarter of 2020 showed an increase of 4.1%, up one-tenth of a percentage point from the initial reading but slightly below the 4.2% Dow Jones estimate.

The drop in the headline jobless claims number masked continued pressures in the labor market.

Though the overall number fell, the rolls of those filing through pandemic-related programs continued to rise, with just over 1 million more claims on the Pandemic Emergency program, which compensates those whose regular benefits have run out.

All totaled, there are were just over 19 million Americans receiving some compensation as of Feb. 6, an increase of more than 700,000 from the previous week.

More recent data shows, however, that claims are rising in the Pandemic Unemployment Assistance Program, which provides benefits to those who normally wouldn’t be eligible. For the weeks of Feb. 13 and Feb. 20, more than 964,000 Americans filed under the program.

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