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Unemployment claims fell sharply last week despite severe winter storms that swept through Texas and other parts of the south, the Department of Labor reported Thursday.
Initial jobless claims 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 841,000 the previous week, a downward revised figure of 20,000.
Despite the drop, the total, the lowest since November 28, was still well above anything the U.S. labor market had experienced before the Covid-19 pandemic.
Continuing claims also fell, falling from 101,000 to 4.42 million, the lowest since March 21, 2020, but also still well above anything the job market had seen before the pandemic.
The drop probably didn’t take into account those expected to be dropped off due to the storms.
“The sharp drop in jobless claims is likely due to the fact that residents of the states hardest hit by last week’s massive storm, especially Texas, have better things to do than file jobless claims,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We expect a rebound next week. The trend appears to be roughly flat, but we remain of the view that claims will begin to drop soon, slowly at first, then more quickly as the economy reopens. ‘accelerates in April and May. “
Other economic reports Thursday morning showed spending on durable goods jumped 3.4% on the title and 1.4% excluding transportation, both well above Wall Street estimates.
In addition, the second reading of gross domestic product in the fourth quarter of 2020 showed an increase of 4.1%, up a tenth of a percentage point from the initial reading, but slightly below the estimate. of 4.2% of Dow Jones.
The decline in the total number of jobless claims masked continuing pressures in the labor market.
Although the overall number has fallen, the number of people filing applications under pandemic-related programs has continued to increase, with just over one million more applications under the Pandemic Emergency Program. , which compensates those whose regular benefits are exhausted.
In total, there were just over 19 million Americans receiving compensation as of February 6, an increase of over 700,000 from the previous week.
More recent data shows, however, that claims are increasing under the Pandemic Unemployment Assistance Program, which provides benefits to those who normally would not qualify. For the weeks of February 13 and February 20, more than 964,000 Americans applied for the program.
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